by Chidem Kurdas A nice thing about Paul Krugman, he does not mince his words. Thus his new book, End This Depression Now!, repeats as boldly as possible the central point he’s repeatedly made in his New York Times columns and blogs for years. Namely, governments have to spend a lot more. They have to … Continue reading Krugman Redistribution or Ponzi Scheme
by Chidem Kurdas The case made for minimal government by Milton and Rose Friedman in their 1979 book, Free to Choose, has been debunked, according to Berkeley professor Brad DeLong. Basically, he avers that the Friedman program has been tried and failed. As a commentary on Friedman, this is outrageously misleading. But Mr. DeLong provides … Continue reading DeLong, Friedman and Maximal Government
by Mario Rizzo Although by the standards of contemporary economics, I am a historian of economic thought, I am not a historian of economic thought, properly considered. Thus my major interest in F.A. Hayek’s business cycle theory is not from the point of view of a historian. My interest is only incidentally in how Hayek’s contributions … Continue reading Yes, Paul: It is Hayek versus Keynes
by Mario Rizzo More than thirty-five years have passed since Friedrich Hayek said in his Nobel speech, “The Pretence of Knowledge" (1974): “The theory which has been guiding monetary and financial policy during the last thirty years… consists in the assertion that there exists a simple positive correlation between total employment and the size of … Continue reading Quick, More Stimulus!
by Mario Rizzo Brad DeLong continues his long-distance diagnosis of my mental and moral character. UPDATE: Steven Landsburg has a different take.
by Mario Rizzo “What it [the total of stimulus-created or saved jobs -- MR] doesn't consider are the jobs lost due to the very policies that are "saving" jobs. Government can only spend what it takes from the private sector one way or another, either through taxation, borrowing, or the redistribution effects of inflation. For … Continue reading Crowding Out DeLong: A Clarification
by Mario Rizzo Brad DeLong thinks that, under present circumstances, the crowding out of private expenditure by fiscal stimulus is not a live issue. The basic argument is that since neither average wages nor interest rates have risen in response to stimulus, no resources are being diverted from private to public uses. I am unsure … Continue reading Crowding Out Brad DeLong
by Mario Rizzo As we have been saying here, the claims that the fiscal stimulus has saved or created X number of jobs is not a simple empirical question. It must be an inference from a model that tells us what would have happened in the absence of that stimulus. Collecting reports from various firms … Continue reading Mankiw And Meltzer Are Right! More Or Less
by Mario Rizzo “And government spending is as good as anybody else’s.” Brad DeLong seems to think so. But the idea is only plausible because it has been repeated many times and because it is a politically convenient “truth.” I think everyone would agree that we have a complex economy. There is a vast and intricate … Continue reading Is All Spending Created Equal?
by Mario Rizzo I am reading with some exasperation Brad DeLong’s comments in his exchange with Tyler Cowen on the efficacy of the stimulus package. Clearly, DeLong is a rigid aggregate demand theorist. He talks about output and employment as if it were some homogeneous thing. In his mind, macroeconomics is just about … Continue reading Keynes Against DeLong: A Comment on the Cowen-DeLong Debate