Arnold Kling doesn’t support the stimulus, but he doesn’t agree with fresh water critics either. He refers to Mankiw’s classification of macroeconomists as “scientists” and “engineers” then writes Because the data are not powerful enough to reject any hypothesis against an interesting alternative, the macroeconomic “scientists” divorced themselves from the “engineers,” who continued to use […]
by Robert Menzie Chinn provides an excellent summary of arguments that a fiscal stimulus will have no effect on GNP. He charitably doesn’t mention the deduction from an accounting identity. I can’t resist arguing against the arguments which he lists.Click the link to find the arguments. Excellent summary. I think that there is one important […]
by Robert I’d say that Cochrane’s pure quantity theory of money argument against the stimulus is not nonsense like Fama’s effort to learn about the world from an accounting identity. This means I disagree with Krugman who focuses on the word “accounting” in Cochrane’s post. I comment on a diatribe by Brad DeLong which has […]
by Robert Krugman is back to arguing that this recession will be followed by a long period of slack, that is low employment growth as were the last two and that therefore the standard argument in, for example, his textbook against fiscal stimulus and especially against spending as a stimulus is not convincing in this […]
by Robert Will Wilkinson asks what’s with the economics profession. A bit more on the public relations quandary the economics profession ought to be in, if it isn’t already… When I see DeLong more or less indiscriminately trashing everyone at Chicago, or Krugman trashing Barro, etc., what doesn’t arise in my mind is a sense […]
Robert Waldmann Robert Barro wrote an op-ed in The Wall Street Journal. The substance of the op-ed is to report an estimate of the Fiscal multiplier 0.8 which is less than one. Thus, according to Barro, a stimulus will partially crowd out of investment, consumption or net exports and not just reduced leisure. Paul Krugman […]
Robert Waldmann DeLong criticizes the introduction to the second edition of “The Road to Serfdom” On Hayek you prove that Hayek claimed that the UK was on the road to serfdom, you don’t prove that he claimed that it had gone beyond the point of no return on that road, that a U-turn before arrival […]
Robert Waldmann Pieter Beinart serves up some conventional wisdom in the Washington Post. Unfortunately he is totally wrong, because he hasn’t checked the facts in the past 7 years. Beinart wrote “Older liberals remember …. They also remember the welfare reform debate of the mid-1990s, when prominent liberals predicted disaster, and disaster didn’t happen.”Oh didn’t […]
Robert Waldmann Gary Becker writes (via Lane Kenworthy who is strangely polite in response) As Posner and others have indicated, there appears to have been a huge conversion of economists toward Keynesian deficit spenders, but the evidence that produced such a “conversion” is not apparent (although maybe most economists were closet Keynesians all along). This […]
Robert Waldmann Brad DeLong has been denouncing Eugene Fama for arguing that an identity proves that the stimulus won’t work as advertised. Greg Mankiw attempts to defend Fama by arguing that Fama was assuming that the classical model, in which all markets including the labor market clear, holds. Brad DeLong notes that Fama made it […]