tag:blogger.com,1999:blog-17232051.post5926542562739542244..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: Chucking the Solow growth model, cont.Noah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-17232051.post-54958174945473191802012-02-15T12:29:02.718-05:002012-02-15T12:29:02.718-05:00Noah,to add to your skepticism, none of the releva...Noah,to add to your skepticism, none of the relevant technology measures (patenting or R&D) have experienced a decline like the did in the 1970s.CAhttp://www.hofstra.edu/Faculty/fac_profiles.cfm?id=26noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20645599783331500772012-02-14T20:53:23.014-05:002012-02-14T20:53:23.014-05:00Minds think alike. I prposed Bullard's correc...Minds think alike. I prposed Bullard's correction of his earlier claim in a comment on DeLong on Krugman on Bullard<br />http://delong.typepad.com/sdj/2012/02/asset-prices-and-potential-output.html<br /><br />His new claim is that output was above potential in 2006. That is possible with imperfect information and very possible with nutso crazy irrationaliy given the definition of the phrase.Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-75527933148478462572012-02-14T19:26:08.811-05:002012-02-14T19:26:08.811-05:00Bullard's Point 2:
However, self-fulfilling (...Bullard's Point 2:<br /><br /><i>However, self-fulfilling (but unrealistic) expectations about asset prices temporarily pushed GDP growth above its new, lower trend.</i><br /><br />Geeze, you'd think a guy who actually works at the fed could have a look at Fed data.<br /><br />I'd like to see any evidence for above trend GDP growth in the bubble years.<br /><br />http://research.stlouisfed.org/fred2/graph/?g=51p<br /><br />Seriously. WTF?!?<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-87698321568199278012012-02-14T16:13:32.658-05:002012-02-14T16:13:32.658-05:00I thought that Solow's growth model was that t...I thought that Solow's growth model was that total factor productivity grows not because of capital deepening but because of technological improvement. Obviously you all are talking about something else.<br /><br />As for housing as capital, it is not a productive asset the way machinery is. It is a consumer durable. It's only when you start thinking abstractly that the distinction becomes blurred. What stickiness of wages has to do with it I don't know.<br /><br />Obviously I don't speak Pig Latin.Luke Leahttps://www.blogger.com/profile/11290760894780619646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-12171657358675772402012-02-14T16:05:03.386-05:002012-02-14T16:05:03.386-05:00"What is the ratio of total capital to the an..."What is the ratio of total capital to the annual output of the economy?"<br /><br />A rule of thumb used to be that it takes three dollars of investment to generate one dollar of income, in what used to be called underdeveloped countries anyway. This was from Barbara Ward's "The Rich Nations and the Poor Nations." It's still worth a read, if only for the way people of good will thought about these issues fifty years ago. She is a good writer.Luke Leahttps://www.blogger.com/profile/11290760894780619646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79717032253844479482012-02-14T15:31:40.040-05:002012-02-14T15:31:40.040-05:00Asset shocks can definitely affect economies. The...Asset shocks can definitely affect economies. The recession of 2000-2002 in the States was at least partially due to the popping of the tech bubble. However, at least the tech bubble left behind lots of useful infrastructure. The worst recessions, like what we had, are ultimately about severe malinvestment and debt overhangs.farm land investmenthttp://www.greenworldbvi.com/alternative-investments-options/agricultural-farmland/noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-24111664519329017702012-02-14T10:03:33.797-05:002012-02-14T10:03:33.797-05:00I've heard it claimed that rebuilding after a ...I've heard it claimed that rebuilding after a natural disaster adds to GDP. If so, could they not be used as a natural experiment to analyze effects of reduction in capital stock, local stimulus spending etc.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-42321395600553138902012-02-13T18:57:25.101-05:002012-02-13T18:57:25.101-05:00I suspect that after a war, wage stickiness pretty...I suspect that after a war, wage stickiness pretty much goes out the window. I saw a program about the history of Daimler Benz that said that after WW II the workers came back and worked for a mere pittance to get the bombed out factories cleaned up and back in production. <br /><br />What is the ratio of total capital to the annual output of the economy? If you consider plant and equipment it is probably less than one. If you include roads, bridges, housing and commercial buildings you might get up to three. Include education and you might get up to four. <br /><br />Any country willing to have a net savings rate of 10% of gdp can build or rebuild pretty quickly. Western Germany and Japan had rebuilt by the mid 1960s after being basically bombed flat in 1945.<br /><br />That is the problem I have with Bullard. We know from historical experience that massive destruction of physical wealth can be made up in a twenty year period. The United States has primarily lost paper wealth so the bounce back time should be much smaller (ie less than five years).Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-14000709452916847912012-02-13T16:20:12.298-05:002012-02-13T16:20:12.298-05:00Abstracter and abstracter.
Right now I'm wo...Abstracter and abstracter. <br /><br />Right now I'm wondering if our accumulating trade deficit is reducing our capital stock? As a reducto absurdum, why couldn't we let China make everything we use until all our factories had rusted from disuse and we had no capital left?<br /><br />I hear China has built way too many ships. Why won't that ruin the shipbuilding industry around the world? They did the same thing with solar panels.<br /><br />I realize these are unsophisticated arguments.Luke Leahttps://www.blogger.com/profile/11290760894780619646noreply@blogger.com