Relevant and even prescient commentary on news, politics and the economy.

Who was more correct and dynamic?

by Robert Waldmann Kevin Drum quotes Tyler Cowen and I wrote a huge comment (without clicking the link) just about the quoted passage. “Tyler Cowen posits today that on economic issues, the right wing was both more dynamic and more correct than the left during the 70s and 80s, with “peak right” coming in 1989. After that, […]

Would Keynes say Krugman is assuming Say’s law? … Just saying

I wrote that Paul Krugman is assuming full-employment. Yesterday Krugman basically pleaded with the Fed to not taper. I see full-employment as constrained by effective demand, which can be determined by quite simple equations. My view comes from Keynes and chapter 3 of his General Theory book. “An alternative, though equivalent, criterion is that at […]

Estimating profit rates of capital

The principles of effective demand can be used to evaluate the aggregate profit rate on capital. This measure is a useful indicator of the business cycle. When the aggregate profit rate gets sluggish or falls, the economy is tempting a recession. The basic equation to determine the aggregate profit rate on capital is… Aggregate profit […]

James Galbraith, Neil Barofsky, and John Coffee Discuss Lessons from Lehman Meltdown

Via Naked Capitalism comes this video discussion  FIVE YEARS ON, LEARNING LEHMAN’S LESSONS FROM THE PANIC OF 2008- Panel Discussion in a panel discussion with James K. Galbraith (Economics Professor at the University of Texas), Neil Barofsky (former Inspector General for overseeing TARP), John Coffee (Law Professor at Columbia University). A link to the entire event, including Elizabeth […]

Links to recent trade deficit posts on Angry Bear

Stiglitz on globalization: the MNE’s bought the law by Linda Beale Trans Pacific Partnership bad for the middle class, but how bad? by Kenneth Thomas Latest World Trade Organization lunacy by Dan Crawford Trans Pacific Partnership: A new Constitution by Dan Becker Letter from an angry reader by Stormy

Krugman – Are we getting close enough to Full-employment?

Paul Krugman asked today… “Are we getting close enough to “full employment” that it’s time to let up on the gas? How much slack is there in the economy, really?” By letting up on the gas, he is referring to tapering by the Federal Reserve. Tapering would signal tightening as he ends his post with […]

However, we did try it.

by Robert Waldmann “If non-bureaucratic mechanisms like markets or decentralized experimentation could achieve the same or better results at less cost and without the political taint of Big Government, why not try it?* “ Might have been an interesting question in 1993, although it starts with an “If” clause which assumes the new Democrats are […]

More on part time jobs

Moody’s economist Marisa DiNatali discusses the idea of part timers and current times: Though some businesses are claiming that they are hiring more part-time workers to avoid the Affordable Care Act’s employer responsibility requirements, which apply to companies with more than 50 full-time employees, that incentive is limited and research from Moody’s economist Marisa DiNatale […]

Economic growth and perspectives…links

What does economic growth mean for Americans by Uwe E. Reihnhart Suppose we placed a carefully selected sample of men on a hot stove and another sample of men on dry ice. Could we reasonably conclude that, on average, they were comfortable? As a nation we worship a deity called economic growth… The rich get richer […]

Permanent income hypothesis

In this brief post, Krugman clearly restates his clear (and plausible) view that rule of thumb ad hoc paleo Keyensians had a lot to learn from Milton Friedman. He mentions the Phillips curve. I think I detect a hint of Forder in this sentence “We can argue how many economists really believed in a stable […]