Greenspan Paradox on Recovery

by Chidem Kurdas

Alan Greenspan exemplifies an inconsistency that appears to be widespread. He reportedly said that the stimulus has fallen far short of expectations and the government should get out of the way and allow businesses to power the recovery. At the same time, he’s so worried about budget deficits that he supports higher taxes.   

Threatening more taxes is not exactly the way to encourage economic activity.

Robert Barro and His Black Box

by Mario Rizzo

I am both intrigued and annoyed by Robert Barro’s recent opinion piece in the Wall Street Journal. He adduces empirical (econometric) evidence to support the view that the fiscal stimulus package has done very little good in the short run and will do harm in the long run. I do not want here to discuss technical data or identification problems. Instead, I want to discuss something both more elementary and more profound.

The world of econometric estimation is a world shrouded in mystery, even for some econometricians like Edward Leamer of UCLA, for example.