What's happening in monetary policy and macroeconomics.
And Brad is right: if you’ve reached the point where you don’t pay attention to anything that might disturb your orthodoxy, you’re not doing science, you’re not even pursuing a discipline. All you’re doing is perpetuating a smug, closed-minded sect.
Apparently we have reached the "I know you are, but what am I" stage of this epic exchange.
Yes, kind of a waste of time, isn't it?
though it is funny considering his recent comment about how he does not read right of center economics blogs.
You know I was refering to you, right Stephen?But yes, I would say perhaps 75% of the whole thing was a waste of time... maybe 25% good thoughts.
Daniel,I'm slow. You'll have to decipher your comment for me.
Anybody who doesn't own up that they have a smug, closed mindset is either a charlatan or an idiot or incredibly naive.
That's quite a choice. You need to offer more options.
It makes me wonder if Krugman stopped interacting with doctoral students outside the Northeast given his claims.
I guess the interesting question is: where do Stephen Williamson and Krugman get their ideological predispositions from ? Is it some innate psychological drives or what ? This is clearly part of a wider need for an economic model of ideological choice - do people make rational choices of ideology ?For example, I seem to remember reading a paper that argued that opinion polls found that, compared to Americans, a majority of French citizens do not believe in a "just world" - that you get what you deserve, that hard work pays off. Thus, French citizens are more predisposed to wealth redistribution.
So is that to say that Cochrane, Fama, Lucas, et al *do* understand New Keynesian models and have rejected fiscal stimulus on coherent grounds?
Second last anonymous,I can't speak for Krugman obviously. I have a political background. I grew up in Canada and am not offended by having the government do some things that the average American would rather it did not do. My parents and grandparents were members of the Liberal Party (to the left of the Democratic Party), and I even had some relatives who worked for the NDP (i.e. socialists). When I do economics, I try to be an objective scientist.
"So is that to say that Cochrane, Fama, Lucas, et al *do* understand New Keynesian models and have rejected fiscal stimulus on coherent grounds?"Yes, I think that is accurate.
But Fiscal Stimulus does not matter to the models. It matters to reality.This is why both "New Monetarist Economics" models are wrong and "New Keynesian" models are wrong.
Fiscal stimulus is just a special type of deficit spending. All deficit spending is financed by debt issuance. The Fed controls the interest rate on the short term debt. Long term debt is just a derivative of this short term debt. The reason why the USA issues debt to deficit spend is because the Constitution says so. This means that the Federal Debt is political phenomena. It really has nothing to do with economics.The economic reason to issue Debt is for controlling inflation by the Fed setting interest rates. The Fed figured that out years ago when they realized that they cannot control the money supply.
See the next post:http://newmonetarism.blogspot.com/2011/03/hal-coles-take-on-krugmandelong-debate.html