We have an incomprehensible, to most, outside-in view of the world. David Friedman says something correct but incomprehensible: Climate aside, we do not live in a static world—consider the changes that have occurred over the past century. The shifts we can expect to occur due to technological progress alone, even without allowing for political and […]
Prof. Delong: The American economy appears to be nearing the end of contraction. That’s good news, particularly when one considers that only about 10% of the funds authorised in this year’s stimulus bill has been spent; the plan is only beginning to ramp up and outlays will peak in 2010. We should expect that injection […]
The presumption is that financial bubbles are super-why-didn’t-you-stupid-macro-people-predict-it-and-prevent-it bad. Guillermo Calvo says not so fast. I like the Rawlsian robustness check.
I’m actually with Will Wilkinson when he talks up “liberaltarianism” and I support a reasonable social safety net. I’m one of those people that thinks rising GDP indicates increasing interdependence, that that is a good thing and that self-sufficiency is the road to poverty. Today Wilkinson suggests a reason why liberaltarianism might be a non-starter: […]
I’m what you might call a political newb so this might be an obvious question: why is Obama talking about redistributionist policies like credit cards and health care when the real problem in America, on this front at least, is Black poverty? What political costs would he pay that outweigh the large benefits of fixing […]
In the latest NEP-MAC, there’s 12 papers on fiscal policy out of 64. This paper finds significant crowding out effects. This one claims, “discretionary fiscal policy is more timely than conventional wisdom would suggest.” Those two are data papers, but this theory paper explores the implications of imperfect competition in the goods market and concludes […]
Many (most… all…) claims about money policy contain some predicate, explicit or not, that the money authority actually can have real effects (e.g. Hamilton, “If you think that the Federal Reserve is responsible for more than 15-20% of the variation in the CPI, …”). This seems to be a pretty important assumption. Why don’t I […]
There is, of course, no reason why imaginability should have any relationship to underlying likelihood – plausibility has no correlation with probability other than in our minds. and that’s why regulation doesn’t work. The author samples from Kahnman and Tversky’s work and he excerpts from Berkshire Hathaway’s annual report.
This long Sumner post is well worth it. My favorite part is all of it but bloggy customs require an excerpt: The intuition is that if the Fed always targets the forecast, and if Fed forecasts are pretty close to the consensus private sector forecast, and if the Fed never targets an NGDP growth path […]
I haven’t been following the bail-out debate between Krugman and Delong, there are dissertations to write. Jonah Lehrer claims to summarize the disagreement. Krugman thinks toxic assets really aren’t worth that much and Delong thinks investors are risk averse en masse. Lehrer adds: I think one way to evaluate these dueling positions is to look […]