Applying Keynes’s Advice in 1925 to Churchill to Recent Policy Responses to the COVID-19 Pandemic and Its Aftermath

This paper considers Keynes’ insights from The Economic Consequences of Mr. Churchill (ECMC) in light of three recent events: the onset of the COVID-19 Pandemic, the 2022 pivot toward inflation targeting monetary policy, and the economic policies enacted during the second presidential term of Donald Trump. It argues that Keynes’ insight that governments have the capacity to derail economic recoveries through an array of policies that hurt workers and households can help us understand the policy successes and failures of these three events. At the time of writing, Keynes’ policy insights offer a blueprint for future recovery minded policies: strong economies should provide ample fiscal and monetary assistance to promote domestic aggregate demand, while eschewing policies that disproportionately burden households and workers.