tag:blogger.com,1999:blog-17232051.post804619859791728498..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: Commie commie commie commie commie K-KeynesianNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger78125tag:blogger.com,1999:blog-17232051.post-25975830786819504372015-01-03T16:07:20.015-05:002015-01-03T16:07:20.015-05:00The Keynesian position is that recessions are caus...The Keynesian position is that recessions are caused by a shortage of nominal cash flow. The solution to recessions is therefore to increase the nominal cash flows until the recession goes away.<br /><br />The policy implication here is that while there is unemployment in the economy the onus is on the opponents of any given outlay to point to *actual harms* which the proposed outlay would cause, and which outweigh the benefits, including the benefit of increasing nominal cash flows. Only once the economy is operating at full capacity does the proponent of any given public outlay need to justify that the proposed spending is not "wasteful."<br /><br />Because *definitionally,* while there is unemployment in the economy there is no such thing as *wholly* wasteful spending.<br /><br />For Cochrane to hide behind "wasteful" spending is hence either anti-Keynesian pseudoscience or a nakedly bad faith argument.<br /><br />- JakeJakeShttp://www.eurotrib.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-59032367796771391962014-12-31T06:30:41.071-05:002014-12-31T06:30:41.071-05:00His feud with Krugman won't end because Cochra...His feud with Krugman won't end because Cochrane will never engage with IS-LM; he will wait for it to die out; he already wrote the autopsy.<br /><br />Basically, Krugman says that understanding IS-LM is a fantastic way to gain many many insights and to avoid many many pitfalls about economics. Krugman isn't opposed to new models or new ways of modeling. He likes <a href="http://www.columbia.edu/~mw2230/G_ASSA.pdf" rel="nofollow">Woodford's paper,</a> and here he is <a href="http://www.princeton.edu/~pkrugman/optimalg.pdf" rel="nofollow">doing New Keynsian himself in 2008.</a><br /><br />Cochrane's point of view is scientific calculations with equations. He wants dynamic equations not static illustrated pictures or sketches with lines and arrows, storytelling, and hand-waving. He wants graphs vs. time. It's like, why watch a silent movie when we have sound? It's like he just feels that IS-LM is to economics as 4 humors is to medicine ("Hippocratic Medicine" would mean balancing the 4 humors just as "Keynesian Economics" would mean equilibriating IS and LM). Cochrane ain't interested in IS-LM at all.<br /><br />Cochrane has said:<br /><br />(1) "Keynesian" means ISLM-ASAD.<br /><br />(2) "Keynesian" and "New-Keynesian" are as different as Ptolemaic and Copernican astronomy. Yeah, both are about the motion of the stars, but that's it. <br /><br />(3) "New-Keynesian" DSGE (Dynamic Stochastic General Equilibrium) models are much in vogue, but have really nothing to do with static Keynesian ISLM modeling. Many authors would like it to be so, but when you read the equations you will find these are just utterly different models.Michael Rodgershttps://www.blogger.com/profile/13411059618332889717noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-30736271840751114812014-12-30T14:19:39.407-05:002014-12-30T14:19:39.407-05:00I'll just leave this here to clear up this con...I'll just leave this here to clear up this confusion:<br /><br />http://econperspectives.blogspot.com/2008/05/supply-vs-quantity-supplied.html<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-35188896118232041302014-12-29T15:50:23.082-05:002014-12-29T15:50:23.082-05:00Tom: Actually, those are not the usual economic de...Tom: Actually, those are not the usual economic definition of supply and demand. <br /><br />E.g. http://economics.about.com/od/supply/p/supply.htm: Supply is "the total quantity of a good or service that is available for purchase at a given price." Similarly, demand would be the quantity that people are willing and able to buy at a given price. Needless to say, those do not need to be equal, and are dependent on price and time.<br /><br />Supply=demand is an assumption that need not be true in all times and places, and indeed it isn't. Anytime there's a waiting list for a product (e.g., a Tesla), demand exceeds supply, and vice versa if product is sitting on the shelf and not selling.<br /><br />If supply=demand was a tautology, then what purpose would it serve?Surdasnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-75793226858823957522014-12-29T11:36:02.521-05:002014-12-29T11:36:02.521-05:00Hi John,
This is your wife here. Dinner is getti...Hi John, <br /><br />This is your wife here. Dinner is getting cold and you need to come back to the table and stop mashing your keyboard. <br /><br />Lots of Love, <br /><br />Boo-BooAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-42363982562220114622014-12-29T09:14:50.810-05:002014-12-29T09:14:50.810-05:00The main disagreement is in the definitions of the...The main disagreement is in the definitions of the words "stimulus" and "Keynesian": Cochrane defines stimulus as waste and Keynesian as waste-makes-haste. Krugman defines stimulus as priming-the-pump and Keynesian as priming-makes-pumping.<br /><br />But as long as we don't use those words, <strong>Cochrane and Krugman have the exact same policy prescription:</strong> Government should now, because interest rates are low and unemployment is high, undertake more genuine infrastructure improvement projects -- ones that reduce unemployment and actually improve infrastructure -- and finance them with debt. And government should, when the economy improves and unemployment goes down, undertake fewer such projects and finance them with revenues.Michael Rodgershttps://www.blogger.com/profile/13411059618332889717noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84138473066833488862014-12-29T01:24:17.691-05:002014-12-29T01:24:17.691-05:00The discussion you've referenced actually supp...The discussion you've referenced actually supports my claim. The fact that you (nor Krugman) can see this is humorous. <br /><br />Also, my 'fantasy world' isn't consumed by a perpetual search for color/race-based assumptions/straw men.<br /><br />Good day. NoahSensenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-53600817889520994892014-12-28T18:43:18.315-05:002014-12-28T18:43:18.315-05:00Here's Cochrane's response to my assertion...Here's <a href="http://johnhcochrane.blogspot.com/2014/12/autopsy.html?showComment=1419803523210#c769441044983456661" rel="nofollow">Cochrane's response</a> to my assertion (basically the last two paragraphs above):<br />"Sorry, that's just price = present value, which anyone agrees with. Even my anti-stimulus opeds that Krugman keeps flogging around say that low interest rates, low prices and available contractors makes more projects have positive present values. What makes an argument 'Keynesian' is precisely the proposition that we get a multiplier effect out of completely wasted spending."Michael Rodgershttps://www.blogger.com/profile/13411059618332889717noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-39991978546628851032014-12-28T08:21:04.841-05:002014-12-28T08:21:04.841-05:00The feud is insane. Cochrane says he's in fav...The feud is insane. <a href="http://johnhcochrane.blogspot.com/2012/01/stimulus-and-etiquette.html" rel="nofollow">Cochrane says he's</a> in favor of deficit-raising countercyclical fiscal policy "for simple tax-smoothing, consumption-smoothing, and social-insurance reasons" as well as "debt financing of 'infrastructure' or other genuine investments. If the project is valuable, do it. And recessions, with low interest rates and available workers, are good times to do it." And <a href="http://johnhcochrane.blogspot.com/2014/11/the-neo-fisherian-question.html" rel="nofollow">here Cochrane says</a> that he believes MV=PY "has to go out the window."<br />These are Krugman's <a href="http://krugman.blogs.nytimes.com/2014/12/27/fiscal-policy-at-the-zero-lower-bound-again/" rel="nofollow">main</a> <a href="http://krugman.blogs.nytimes.com/2014/02/01/macroeconomic-populism-returns/" rel="nofollow">points,</a> to which Cochrane is apparently in complete agreement. I'll bet there's a lot more agreement to find.<br /><br />The feud is silly, silly, silly. So much tempestuous anger from Cochrane and scathing disappointment from Krugman. <br /><br />Cochrane defines the argument as being about whether "<em>additional</em> spending -- whether needed or not -- raises output and general welfare." Similarly <a href="http://pragcap.com/botching-the-keynesian-autopsy" rel="nofollow">Cullen Roche,</a> agreeing with <a href="http://economicsone.com/2011/07/20/what-does-anti-keynesian-mean/" rel="nofollow">John Taylor,</a> defines the argument as being about "the effectiveness of discretionary countercyclical policy intervention in the economy."<br /><br />The key words here are additional, needed, and discretionary. And these words describe politics not economics. Every time government decides on a project, some people will vote no thinking the project itself or its NPV isn't acceptable, that it's additional, unnecessary, discretionary, and therefore wasteful and improper, while other people will vote yes thinking the project itself is necessary and its NPV is proper, and therefore it's appropriate investment.<br /><br />What we're left with is a joke by Keynes that Cochrane refuses to get. The joke is that digging for gold to use as money is a waste in a country with fiat money. The point of the joke is that lots of things are far more worth doing than mining for gold to use as money. Cochrane continues to interpret the joke as a serious argument by Keynes that government should waste money. "Waste money to make money!" is what Cochrane hears, but that's not the Keynesian message.<br /><br />No, Keynesians don't want broken windows for people to fix, buried dollars for people to mine, new wars for people to fight, natural disasters for people to rebuild, alien invasions for people to fight, or wasted waste for people to waste. <br /><br />Keynesians want appropriate (not additional or discretionary but necessary and proper) countercyclical fiscal policy including both automatic and nonautomatic measures. When capital and labor are idle, a lot more necessary projects become proper.Michael Rodgershttps://www.blogger.com/profile/13411059618332889717noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-5906660460723683832014-12-27T09:57:50.126-05:002014-12-27T09:57:50.126-05:00Civil-acting, perhaps. Adult, indisputably.
Objec...Civil-acting, perhaps. Adult, indisputably.<br /><br />Objective? Mankiw?<br /><br />Are we talking about this Mankiw? http://krugman.blogs.nytimes.com/2009/08/28/heredity-environment-justice/?apage=2#comments (Linking to Krugman's call-out instead of the original version because I refuse to give pagerank to racist drivel.)<br /><br />What color is the sky in your fantasy world?<br /><br />- JakeJakeShttp://www.eurotrib.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-80035713931435959672014-12-26T21:01:42.001-05:002014-12-26T21:01:42.001-05:00Well, you apparently have your own special definit...Well, you apparently have your own special definitions. Among normal people, supply is the volume of goods and services sold, and demand is the volume of goods and services purchased. And they are by definition always equal.Tomnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-75889750938961446612014-12-26T04:44:06.734-05:002014-12-26T04:44:06.734-05:00If you read comments in blogs, you soon see that e...If you read comments in blogs, you soon see that everyone to the Right of Obama (i.e. the far-far-right) thinks that Obama and everyone to the left of Obama is a communist.<br /><br />Maybe Cochrane is smarter than the actual blog commenter -- Noah seems to think so despite the idiocy Cochrane seems to spew in the WSJ -- and doesn't really believe that Obama is a communist. But the choir who Cochrane is preaching to certainly does believe that Obama is a communist. And Krugman is way, way left of Obama.Cesiumhttps://www.blogger.com/profile/02025636403503365433noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-2883252601306119132014-12-25T18:28:46.726-05:002014-12-25T18:28:46.726-05:00In a similar regard, what's up with your attac...In a similar regard, what's up with your attacks on Mankiw? At least Mankiw is an objective and civil-acting adult. Definitely an area where Cochrane, Krugman, and yourself could learn a great deal from. Noahpinion is a Mankiw-EconoTroll. NoahSensenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-60931121120849300512014-12-25T18:18:34.578-05:002014-12-25T18:18:34.578-05:00Hello. I'd like to point out there's a new...Hello. I'd like to point out there's a new AS/AD model of the Italian economy, here: https://ideas.repec.org/p/ais/wpaper/1405.html , which shows a better interpretation of the Italian slump caused by the Eurozone. Enjoy the reading.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-8993034903295660912014-12-25T10:18:14.047-05:002014-12-25T10:18:14.047-05:00I know I am but what are you.I know I am but what are you.Barry DeCiccohttps://www.blogger.com/profile/04735814736387033844noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-37895990060227430102014-12-24T20:10:09.863-05:002014-12-24T20:10:09.863-05:00This comment has been removed by the author.Nathttps://www.blogger.com/profile/16313341001000300892noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-12871024837924702552014-12-24T16:17:20.255-05:002014-12-24T16:17:20.255-05:00It's correct as is, though it took me a moment...It's correct as is, though it took me a moment to figure out that the extra "K" is necessary to give "Keynesian" the same number of syllables as "Chameleon":<br /><br />https://www.youtube.com/watch?v=JmcA9LIIXWw<br /><br />(Starts a few milliseconds before :45)Mark Arnesthttps://www.blogger.com/profile/00405144110125493735noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84153372956231226052014-12-24T15:40:25.744-05:002014-12-24T15:40:25.744-05:00What WAS Einstein doing to that milkmaid?What WAS Einstein doing to that milkmaid?Pinkybumhttps://www.blogger.com/profile/14966880596265799283noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-39892718251500846202014-12-24T12:47:43.817-05:002014-12-24T12:47:43.817-05:00Tarp was labeled 'socialistic' as in priva...Tarp was labeled 'socialistic' as in privatizing gains and socializing losses.Davidhttps://www.blogger.com/profile/01860039761890602995noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-30182695508329034612014-12-24T12:34:43.102-05:002014-12-24T12:34:43.102-05:00I thought an extended downward deflationary spiral...I thought an extended downward deflationary spiral required an extended 'Minsky moment'. Tarp/QE probably don't qualify as standard Keynesian policy but having the Fed buy worthless loans from banks, at face value did end the Minsky collapse.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81184642040698793552014-12-24T12:23:10.711-05:002014-12-24T12:23:10.711-05:00Start here: http://www.economicsonline.co.uk/Globa...Start here: http://www.economicsonline.co.uk/Global_economics/Phillips_curve.html<br /><br />There's a lot more to the history, but I don't know one good source that tells it all in depth.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7009576160172542562014-12-24T12:11:35.210-05:002014-12-24T12:11:35.210-05:00I answered in the same style as Noah, actually. Do...I answered in the same style as Noah, actually. Do you have anything more substantive to say? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-50293599046718540102014-12-24T10:54:02.787-05:002014-12-24T10:54:02.787-05:00Maybe you need to organise your thoughts a bit. Th...Maybe you need to organise your thoughts a bit. This just comes across as completely incoherent.reasonhttps://www.blogger.com/profile/10958786975015285323noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-4121713549927813572014-12-24T09:00:38.535-05:002014-12-24T09:00:38.535-05:00Can anybody recommend more serious discussion of t...Can anybody recommend more serious discussion of this point:<br /><br />The Phillips curve failed to understand inflation in the 1970s and its quick end in the 1980s, and disappeared in our recession as unemployment soared with steady inflation.<br /><br />"We'll always have Paris." is witty but doesn't help me understand if that was a serious challenge to Keynesian approaches and what the Keynesian response was.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79561709924995537242014-12-24T07:31:43.904-05:002014-12-24T07:31:43.904-05:00There's a whole post-Keynesian literature out ...There's a whole post-Keynesian literature out there drawing lines between New/neo Keynsians and themselves. Anonymoushttps://www.blogger.com/profile/11018306000410021518noreply@blogger.com