tag:blogger.com,1999:blog-2499715909956774229.post3135007691886486737..comments2024-03-22T22:37:02.639-07:00Comments on Stephen Williamson: New Monetarist Economics: Big Ideas in MacroeconomicsStephen Williamsonhttp://www.blogger.com/profile/01434465858419028592noreply@blogger.comBlogger73125tag:blogger.com,1999:blog-2499715909956774229.post-39275033716644574932014-01-27T13:29:41.416-08:002014-01-27T13:29:41.416-08:00I'm not providing arguments, I'm simply mo...I'm not providing arguments, I'm simply mocking you. I'm not going to argue with a halfwit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-15625548301208563662014-01-27T13:28:10.156-08:002014-01-27T13:28:10.156-08:00No one will miss you, if you keep your promise and...No one will miss you, if you keep your promise and go away.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-28732893255406274382014-01-26T07:14:47.208-08:002014-01-26T07:14:47.208-08:00Ah, the troll who cannot provide anything of subst...Ah, the troll who cannot provide anything of substance is back. You know that you crushed the enemy when he ran out of arguments about the issue and goes ad hominem.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-7791533184948593592014-01-26T07:12:58.889-08:002014-01-26T07:12:58.889-08:00Nope, you are simply wrong.
As expected you cannot...Nope, you are simply wrong.<br />As expected you cannot mention one economic paper which uses verification. If you ever did some empirical work you would know that even the most simple t-test uses falsification and not verification.<br /><br />Physics works in the same way. You can claim that so far the theory of gravity seems to be fine ... but if the apple does one day not fall down but fly up we gotta rethink our theory and improve it.<br /><br />If you could verify a scientific hypothesis you would have reached the end of history, science would be theology, "I can read the mind of God". Real science is far more humble, it acknowledges that a theory is just the best explanation we have so far.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-34667167514929464622014-01-26T07:07:05.450-08:002014-01-26T07:07:05.450-08:00Lack of safe collateral means banks increase credi...Lack of safe collateral means banks increase credit rationing or raise loan rates. This is what has actually happened in the real world, something which you obviously ("I never even discussed the Great Depression") do not care about.<br /><br />So yeah, whatever model you and Williamson use, it works ironically in precisely the other way as the real world functions. So much about bad economists. :D<br /><br />Denial of reality, be it climate change or the worst recession since the thirties (in some European countries recovery is actually slower than during the thirties). And no matter how often you and Willy repeat your mantras about not being conservatives. you only find demand denial, denial of reality and not giving a shit about unemployment on the right wing.<br /><br />I am done as well. Totally pointless to try to talk with the scum of the Earth, neoclassical radicals.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-7388861566671949782014-01-25T20:17:18.853-08:002014-01-25T20:17:18.853-08:00Where I come from people aren't stupid. Clear...Where I come from people aren't stupid. Clearly the above poster isn't from there.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-52569084075927409412014-01-25T12:52:11.125-08:002014-01-25T12:52:11.125-08:00Anonymous of 25 January 5:04 AM.
I never said de...Anonymous of 25 January 5:04 AM. <br /><br />I never said demand does not matter. I never said that food stamps caused the Great Depression. I never even discussed the Great Depression. I also never said that there is no involuntary unemployment, I have said that it depends how one defines involuntary unemployment and what time horizon we are looking at. Finally, contrary to what you say in your follow-up at 5:25 AM, a scarcity of financial instruments that serve as safe collateral should drive their price up and their interest rates down.<br /><br />In summary, we have established two things. A) IF you are an economist, you are a pretty bad one.<br />B) You are a liar.<br /><br />One can forgive you for A, but not for B. Therefore, from now in, feel free to spill your venom and lies uninterrupted. I am done.CAnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-84215253825936920792014-01-25T12:34:40.990-08:002014-01-25T12:34:40.990-08:00You should read Kuhn's "The Structure of ...You should read Kuhn's "The Structure of Scientific Revolutions", which is a historical account of how scientific progress takes place in real life. You will see that Popperian falsification is NOT how any science operates. If it did, science would be impossible. One reason is the Duhem-Quine thesis (http://en.wikipedia.org/wiki/Confirmation_holism).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-44790906658718772432014-01-25T12:23:09.941-08:002014-01-25T12:23:09.941-08:00"There is no financial sector in DSGE models ..."There is no financial sector in DSGE models (Sitglitz and Greenwald were on the right track with their 90s papers)." <br /><br />Interesting you say this, being such an "expert." You might want to look at this paper, http://faculty.wcas.northwestern.edu/~lchrist/course/Czech/BGG%201999%20Handbook%20chapter.pdf . That is just one example of MANY papers that include a financial sector. Stop talking about economics, you only seem to know what you learned in high school economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-40845690546047294572014-01-25T05:56:08.663-08:002014-01-25T05:56:08.663-08:00"Within this new paradigm you have different ..."Within this new paradigm you have different models that make different policy prescriptions, and many still encompass Keynesian ideas."<br /><br />New Keynesian models are labeled Keynesian but they are just RBC plus stick prices (usually not done via Blanchard-Kiyotaki but via a short-cut, Calvo pricing so ironically these supposedly microfounded are quite ad-hoc, they use staggered pricing instead of doing it "properly" via monopolistic competition). Although wage and price rigidity is often called Keynesian Keynes explicitly wrote in Ch.19 that he thinks that more wage flexibility would make matters worse.<br /><br />So here I do not agree with the mainstream. Either you ignore micro like Samuelson et al did, you focus on other micro issues like coordination problems or asymmetric information or you focus upon money as the key issue (or, as mentioned above, you connect money with credit and credit market imperfections and this Stiglitzian way is what I personally prefer).<br /><br />I do not want to be pedantically historian, who cares what a dead economist thought or wrote. But I think it is important to keep in mind that all kinds of economists focus on market imperfections that could explain macro failures which is not Keynesian at all. The only thing that all Keynesian economists have in mind is lack of demand denial. If there weren't so many halfwits in the economist profession this label would be totally unnecessary, we would have a consensus that demand does indeed matter in a recession and the nuts would be extinct (of course not all of them are nuts, contrary to CA's "economics is ideologically neutral" claim there are plenty of political reasons for demand denial which on the other hand does not necessarily imply that you cannot be a small state, large stimulus right-winger or a large state, no stimulus left-winger ... but these kind of folks are rare).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-4880788046570231682014-01-25T05:34:04.514-08:002014-01-25T05:34:04.514-08:00Care to elaborate on how verification works in emp...Care to elaborate on how verification works in empirical economics? Last time I checked all empirical work uses falsification and not verification, you always reject a hypothesis but never verify it.<br /><br />If you can provide a paper which uses this method please name it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-68461821179379812642014-01-25T05:25:28.735-08:002014-01-25T05:25:28.735-08:00"Steve is arguing that the problem IS low dem..."Steve is arguing that the problem IS low demand for certain goods and services, due to the lack of safe collateral."<br /><br />Lack of safe collateral should drive loan rates up or, more realistically, lead to more credit rationing. Credit crunch leads to less investment and too little demand. I guess this is the story.<br />Of course there are three features missing, QE and deleveraging. Via QE banks could partly fix their balance sheets so they should be willing to lend ... but all attempts to get credit flowing again are useless if product demand is low. Households had a more difficult time to fix their balance sheets as there was no proper public relief program for folks who lost their homes so product demand is low.<br /><br />The last part is obviously crucial, especially for the morons who take their intertemporal consumer too literally. The data shows that Friedman got it right, people are actually somewhere in between the Hicksian consumer who eats everything in one period (obviously ridiculous) and the classical consumer who can perfectly smooth consumption over his entire life (wrong as credit markets aren't perfect).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-66199038832461846712014-01-25T05:04:00.325-08:002014-01-25T05:04:00.325-08:00Keynes was the first guy (together with Kalecki) w...Keynes was the first guy (together with Kalecki) who realized two important features of a recession: demand matters and involuntary unemployment exists. Some folks can derive more out of the General Theory but in my eyes these are the only two main worthwhile contributions of Keynes (OK, his distinction between "irreducible uncertainty" and risk expressed in probabilities is also worthwhile). So much about my supposed Keynes fetish.<br /><br />Guys like CA who pretend that they are brilliant scientific economists deny that demand matters in a recession and deny that involuntary unemployment exists.<br /><br />There is no polite word to describe somebody who believes that food stamps caused the Great Depression (or pretends that expansionary fiscal policy in a liquidity trap would not actually be expansionary because macro is complex so let's better do nothing).<br /><br />The funny thing about this is that like CA I am a classical economist. I don't believe any stupid socialist or Post-Keynesian (these guys think that economies are always demand-constrained) nonsense. But in the thirties worldwide, in the nineties in Japan and right now again worldwide (OK, mainly in first world countries) unusual recessions emerged that had two features, a lot of public debt and low interest rates. While we do indeed know too little about QE to evaluate it well we just conducted a large-scale experiment in Europe and its results are what basic macro predicts, contractionary fiscal policy is indeed contractionary.<br /><br />So you are wrong, CA, at least in the fiscal era we are not anymore looking for answers, fiscal multipliers are large right now. But even if we are, like in the case of QE, macroeconomists are not just scientists but also engineers (I read my Mankiw). They cannot just write papers. they always have to provide policy advice. And whether you like it or not, the newest research might be totally useless from an engineering point of view. There is no financial sector in DSGE models (Sitglitz and Greenwald were on the right track with their 90s papers).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-52939049411149924772014-01-24T08:58:20.074-08:002014-01-24T08:58:20.074-08:00"All proper science relies on Popperian falsi..."All proper science relies on Popperian falsification."<br /><br />You need to read your Kuhn.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-51704355768087241862014-01-24T07:28:41.927-08:002014-01-24T07:28:41.927-08:00All proper science relies on Popperian falsificati...All proper science relies on Popperian falsification. Of course you do have to care about empirics (the author of this blogs like most certainly does not) but then you cannot call the stuff you do science. You can call it theory as long as it is not falsified (e.g. string theory in physics) ... but in macro we have just conducted a giant experiment which made millions of people worse off and falsified ample of economic theories while the respective theoreticians still believe in it (e.g. Williamson still believes in his low rates lead to deflation nonsense although plenty of people have showed him that the data tells the opposite story).<br /><br />In short, your dismissal of falsification is equivalent with the plain denial of reality. Another word for this is ideology.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-60264187899116113732014-01-24T07:18:28.069-08:002014-01-24T07:18:28.069-08:00"Qquations are not superior to each other&quo..."Qquations are not superior to each other" is the only piece of substance in your post ... and on a second glance it has actually it no substance at all as you still fail to understand what an identity/definition is and what an equation which captures some aspect of human behaviour (e.g. utility functions are convex as ceteris paribus we prefer a mix of goods over a lot of one good) is.<br /><br />No wonder that Williamson and his fanboys believe ridiculous nonsense, they even do not understand the very basic stuff (where I come from you learn what an identity is in highschool maths).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-61616608172674775122014-01-22T07:11:01.135-08:002014-01-22T07:11:01.135-08:00I liked Economic Policy, Theory and Practice.
htt...I liked Economic Policy, Theory and Practice.<br />http://www.amazon.com/Economic-Policy-Practice-Agn%C3%A8s-B%C3%A9nassy-Qu%C3%A9r%C3%A9/dp/0195322738/ref=sr_1_1?s=books&ie=UTF8&qid=1390403291&sr=1-1&keywords=economic+policy<br /><br />NorwegienAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-40604290598268903222014-01-21T22:04:21.570-08:002014-01-21T22:04:21.570-08:00Just bought this. Thanks for the recommendation.Just bought this. Thanks for the recommendation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-87987817105414338922014-01-20T13:31:45.214-08:002014-01-20T13:31:45.214-08:00Above anonymous is rather confused and seems not t...Above anonymous is rather confused and seems not to understand that equations are not superior to each other. Of course, we are superior to above anonymous, because we're not dumb.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-52517817391372402052014-01-20T13:30:15.694-08:002014-01-20T13:30:15.694-08:00Anyone who cites Popper is obviously way out of hi...Anyone who cites Popper is obviously way out of his depth. Why should we conduct our business as Popper sees fit? Who made him the arbiter of science? He's just another dead(?) guy who we're supposed to beatify because he wrote something down a long time ago. Science does not require his approval.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-5870193750466290722014-01-20T13:27:43.052-08:002014-01-20T13:27:43.052-08:00I really don't get the belief that Keynes had ...I really don't get the belief that Keynes had all the mysteries of the world written down in his book, and all we need to do is figure out what he meant.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-8916657618932963742014-01-20T13:01:39.647-08:002014-01-20T13:01:39.647-08:00You just don't get it!
First, Gintis is a go...You just don't get it! <br /><br />First, Gintis is a good economist for his contributions to the science, like, for example, on the puzzle of prosociality. What he wrote about Keynesian economics is just further proof.<br /><br />Second, nowhere did Gintis say that he cannot stand Keynes. That you chose to express yourself that way shows a lot, but more on that later on. I don't know how he feels about him. I, personally, think Keynes had some powerful ideas and contributions, and was a prolific writer. I quote him often in my syllabus. <br /><br />As far as ideology, again, how wrong can you be? Steve is arguing that the problem IS low demand for certain goods and services, due to the lack of safe collateral. As for me, I favor a permanently higher expenditure for public infrastructure, I supported much of the stimulus bill (on the basis that it helped localities to continue to provide worthwhile public services despite falling tax revenue), and favor an increase in marginal tax-rates for the upper income distribution to pre-Bush levels. These are not right-wing positions!<br /><br />And this is what you don't get. Opposition to Keynesian theory as taught in the 1950 and 1960s is not personal. It is not driven by a dislike for Keynes. Nor is it ideological; Gintis is a socialist: http://en.wikipedia.org/wiki/Herbert_Gintis ). Keynesian theory was an improvement over what existed before, but it had major flaws so it was superseded by a still flawed, but less so, paradigm. Within this new paradigm you have different models that make different policy prescriptions, and many still encompass Keynesian ideas. However, none of these models is convincing enough at this time, so regardless of what Krugman may say, we are still looking for answers. <br /><br />Apparently, perhaps because they have been watching too much Hollywood, some people cannot accept this boring view of science. Instead, they prefer to view each theory as a cult with its own totems (scientists whose work is regarded as consistent with the beliefs of the cult) that are used to unite the faithful and demoralize the opponents. And smart people, like Krugman, whose talking points you have been spilling here except without the benefit of his knowledge of the subject, often encourage this view because they feed from the passion that it stirs, thus addressing whatever emotional inadequacies they have been struggling with through their lives. Congratulations, you two deserve each other. CAnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-2647083826137824432014-01-20T09:32:50.176-08:002014-01-20T09:32:50.176-08:00"The only virtue of rational expectations mac..."The only virtue of rational expectations macro (RA macro), which Athreya explains so nicely in this book, is that it killed Keynesian macro." Compare Gintis with the likes of Krugman, and you get the idea.<br /><br />So you appreciate a heterodox economist because he cannot stand Keynes. As usual the real issue is an ideological one. Even seventy years after the General Theory has been published some right-wing economists cannot stand the notion that in a balance sheet recession an economy is not, as in normal times, supply- but demand-constrained.<br /><br />The real radicals are not the guys who are saying that every few decades we reach a dire situation where we gotta throw the normal rulebook temporarily out of the window. It is the folks who are denying that<br />this dire situation exists (denying involuntary unemployment and so on).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-2578796211874391272014-01-20T09:17:36.144-08:002014-01-20T09:17:36.144-08:00Someone got intellectually crushed and has to reso...Someone got intellectually crushed and has to resort to petty insults because he has run out of arguments.<br /><br />Read your Popper. Until then you are doing ideological but not scientific economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2499715909956774229.post-64509005701337701052014-01-20T09:15:11.436-08:002014-01-20T09:15:11.436-08:00No idea which part you do not understand. An ident...No idea which part you do not understand. An identity/definition does not describe any human behaviour whereas a simple money demand function or the presence of money in a utility functions captures liquidity preferences. Similarly the Euler equation captures our impatience.<br /><br />Is economics on this level OK? Certainly not, there is ample to improve. But any of these equations is superior to an identity/definition which cannot describe human behaviour at all as it is just a definition.<br /><br />No idea which part of the definition of a definition/identity you do not get.Anonymousnoreply@blogger.com