On the blogs

Graph For the Day: Is QE4 Far Away? -- Roger Farmer on why the Fed might be forced to intervene. This one is a bit old, but worth reading, even if you don't agree with Roger on the effect of the stock market on the unemployment rate

Lessons from the Crisis: Ending Too Big to Fail -- New head of the Minneapolis Fed, Neel Kashkari says that financial reform did not go far enough and some banks are still too big to fail

New Keynesian Orthodoxy and Hysteresis -- Robert Waldmann, at Angry Bear, on the Jerry Friedman versus establishment economists debate, and on the fact that with the Kaldor-Verdoorn law (he doesn't cite it, but that's the source of hysteresis), short run effects of macro stimulus have a more significant impact on growth


  1. Regarding the Waldmann piece, I'm not at all sure that Friedman agrees that he may have made a mistake. This does not seem to be what his response (here: http://dollarsandsense.org/Friedman-Response-to-the-Romers.pdf) is saying. See also here http://dollarsandsense.org/blog/2016/02/yet-more-links-on-friedman-sanders-kerfuffle.html (third item down the line) for what seems to me valid criticism of the Wolfers piece Waldman links to,

  2. Romer and Romer claim that stimulus will only have an effect while it is being applied. And they put changes in income distribution is like this. I haven't done any formal modeling, but I don't see this. The stimulus is probably because the less affluent have a higher Marginal Propensity to Consume. I do not see why a policy that leads to a shift in distribution would not have cumulative effects on Romer and Romer's own premises, instead of being an application of an impulse function.

    Romer and Romer express an ideological view of the labor market that I find silly.


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