tag:blogger.com,1999:blog-17232051.post8569533424049883983..comments2024-03-18T22:32:52.802-04:00Comments on Noahpinion: Miscellaneous LucasNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-17232051.post-37471746083560007232011-09-30T04:48:16.755-04:002011-09-30T04:48:16.755-04:00Hi Noah,Details are very true and factual, I do re...Hi Noah,Details are very true and factual, I do really learned something new upon reading this interesting post. Good job! and Thanks!<br /><br /><a href="http://www.kidneystonenews.com/" rel="nofollow">Kidney Stones Home Remedies</a>Kidney Stone Home Remedieshttp://www.kidneystonenews.com/noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-2767150200393848982011-09-27T10:51:26.110-04:002011-09-27T10:51:26.110-04:00If you're doing the Lucas book, discuss Ration...If you're doing the Lucas book, discuss Rational Expectations in the context of his divorce agreement: ex-wife gets half of the "Nobel" monies if the Prize is received within seven years.<br /><br />The last year it was possible for her to receive half, he wins.<br /><br />That is, iirc, the only time in history that Rational Expectations has worked.Ken Houghtonhttps://www.blogger.com/profile/01440837287933536370noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17073309348779663882011-09-27T02:14:46.409-04:002011-09-27T02:14:46.409-04:00"Thanks! I don't want to promote my own s..."Thanks! I don't want to promote my own stuff too too much..."<br /><br />That's right. Never talk about an interesting research result until you are ready to publish. I know of one case where people got scooped because they talked to the press about their interesting experiment and a competing group rushed their own research and got their paper to Nature first.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-36745725613754396512011-09-26T23:24:10.332-04:002011-09-26T23:24:10.332-04:00If you write your book you should devote a whole c...If you write your book you should devote a whole chapter to the Ricardian fallacy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90338477888842168582011-09-26T23:22:24.818-04:002011-09-26T23:22:24.818-04:00Part of the GDP gap is explained if Wall Street is...Part of the GDP gap is explained if Wall Street is reporting entirely fictitious profits and productivity - which seems entirely plausible. Part of the gap is explained if the US "values" the annual production of a doctor at, say, $250,000 and France, for example, values the same production at, say, $100,000. <br /><br />In any event if there is extra production in the US it is all going to the top few percent of the population. It is difficult to see why the bottom 95-98% should support policies that might grow the pie a little but shift things so much in favor of the rich that the incomes (including government services) of the bottom 95-98% actually fall.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-70695025552146984142011-09-26T23:02:55.785-04:002011-09-26T23:02:55.785-04:00It would be good if you actually understood that t...It would be good if you actually understood that the history of macro depends on the fact that it is the result of an incoherence between the marginalist theory of value (that says that if you reduce real wages you obtain full utilization of labor) and the Keynesian principle of effective demand. Without understanding Sraffa your future book will have significant problems. It's a pitty kids in mainstream graduate courses do not learn the capital debates anymore. But if you're serious about it I recommend you spend the time.Matias Vernengohttps://www.blogger.com/profile/09521604894748538215noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-91175640485915454592011-09-26T19:35:28.629-04:002011-09-26T19:35:28.629-04:00If you want a model of how to be generous to Lucas...If you want a model of how to be generous to Lucas, I'd suggest looking at <a href="http://greeneconomics.blogspot.com/2011/09/my-macro-questions-for-prof-robert-e.html" rel="nofollow">Michael E. Kahn's piece</a><br /><br />First lesson: blame the interviewer for bad questions.<br /><br />The "shock" of 2008 was large enough to move the U.S. economy out of the corridor, within which we could reasonably expect the economy to return to trend. Since nearly the whole of modern macro has been solely about how things work <i>within</i> that corridor, there not much to say. Still plenty to apologize for, though.<br /><br />That's what I'd ask him for: an apology.Bruce Wilderhttps://www.blogger.com/profile/09631065564839959376noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-89254851286811520722011-09-26T18:19:28.177-04:002011-09-26T18:19:28.177-04:00@Tilman:
I would hope so too. I'm trying to b...@Tilman: <br />I would hope so too. I'm trying to be generous to Lucas, though... ;-)<br /><br />@most recent Anonymous:<br />Thanks! I don't want to promote my own stuff <i>too</i> too much...Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-62951564992461094002011-09-26T16:55:22.252-04:002011-09-26T16:55:22.252-04:00Honestly, Lucas believes that the length of the cu...Honestly, Lucas believes that the length of the current depression is caused by fear of raising taxes a little bit and a less than perfect health care reform? Maybe a better answer is that there is some debt that needs to unwind to sustainable levels and that, combined with declined asset prices, is having a negative impact on consumer spending. Other than that, most of it is probably a self-reinforcing depressed state... i.e., lower spending leads to lower income leads to lower spending... Stimulus please?<br /><br />Oh, and why didn't Europe and Japan catch up to the per capita GDP of the U.S.? Hm... must be ... high taxes(?). Maybe one could look at the average growth rates of the U.S. economy and Europe when they had confiscatory tax policy on the high end of the distribution. Maybe there's a need for him to rethink the role of taxes. My guess is that we still have much to learn from Solow and those who have elaborated the causes of productivity growth.<br /><br />Anyway, check out my blog:<br />http://socialmacro.blogspot.com/Anonymoushttps://www.blogger.com/profile/14235846531323511190noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-60071034133153534272011-09-26T14:13:36.665-04:002011-09-26T14:13:36.665-04:001) Good to see you promoting your own research
2) ...1) Good to see you promoting your own research<br />2) I suspect what Lucas has in mind is very similar to what Lee Ohanian is claiming - that GD was also caused/sustained by expectations of high taxes and tilt towards labor. I know, sounds ridiculous for businesses to expect that with Hoover in power, but quite a few people in the Chicago/Minnesota camp take Ohanian for a serious scholar of the GD.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-67804927187593752782011-09-26T14:08:48.019-04:002011-09-26T14:08:48.019-04:00"[E]ven at his age, he shows a great deal of ..."[E]ven at his age, he shows a great deal of nuance and skepticism."<br /><br />Don't nuance and skepticism grow with age? I hope so, at least for myself.Tilman Borgershttps://www.blogger.com/profile/08042784384106918184noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-12936608482438999532011-09-26T10:40:11.054-04:002011-09-26T10:40:11.054-04:00I don't agree that this interview says anythin...I don't agree that this interview says anything good about Lucas. He repeats the canard that Obama is more liberal than Clinton. He talks about overbuilding without noting that we're now significantly below trend in residential construction.<br /><br />Regarding the GDP gap between the US and Europe (which seems to vary significantly depending on which dataset I use). How much of this may be due to differences in efficiency? I mean, European states all spend significantly less on health care, for instance. I assume that despite the better outcomes, this translates into lower measured GDP.wlmnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64949529460658347042011-09-26T10:39:10.033-04:002011-09-26T10:39:10.033-04:00Sweden was, and still is, one of the archetypal we...Sweden was, and still is, one of the archetypal welfare states. But about 15 years ago, they did reform their banking mess. And two years ago, they're currency did depreciate, for some time.<br /><br />And guess what. This high tax lots of welfare country has a vigorous business sector, a projected government surplus in 2011 and had the highest economic growth of the entire non-transition European Union in 2010... And it has clearly outperformed the UK and Germany after 1997, when it comes to economic growth.<br />http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tsieb020<br /><br />So, I have to agree with Noah: Lucas (among others) has to learn to check the facts. I know - that's not really part of an education in economics, but it's never too late! One other point: when it comes to productivity per hour, European countries like France and the Netherlands and, until some years ago, Germany, have catched up with the USA. GDP per capita is lower because labor in Europe is more free to choose between work and leisure. So, Lucas is also wrong with his statement that it's puzzling that there was not more convergence between the USA and Europe, after 1970. It's not puzzling at all. There was. And that's in fact common knowledge, among economists. http://rwer.wordpress.com/2011/07/28/productivity-in-europe-two-graphs/ <br /><br />Merijn Knibbe<br /><br />Merijn KnibbeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-31991592404349649392011-09-26T08:48:09.623-04:002011-09-26T08:48:09.623-04:00Noah: One thing that I am confused by is how macro...Noah: One thing that I am confused by is how macroeconomics is presented to the public by academic economists. <br /><br />More specifically, interviews like this WSJ Lucas article strike me as bizarre at some level. It's not that Lucas's sentiments or policy comments are unusual. Indeed, as you mention, his comments follow along standard lines. <br /><br />Rather, what I find confusing is how often I read opinions by macroeconomics and how unclear they are about the assumptions they're making and the models they are assuming when they make very strong policy commentary.<br /><br />As a PhD student (I'm a lower year in your department), it strikes me as strange that this is the public presentation of macro by Professors who are (have been) celebrated within academia. I've actually mentioned this to several of my classmates and they also seem surprised that this is the state of discourse.<br /><br />It'd be interesting to hear your take on this, if you have any specific thoughts.Erichttps://www.blogger.com/profile/16662470051045098136noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-57670647735222973102011-09-26T05:42:23.227-04:002011-09-26T05:42:23.227-04:00Oh - about age as an excuse. My position is that ...Oh - about age as an excuse. My position is that age is only an excuse if the person was previously different. If Lucas had a long history of making stuff up and ignoring/dismissing belittling other theories (despite their merits), then it's not age, it's him.Barry DeCiccohttps://www.blogger.com/profile/04735814736387033844noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-91885196288588250412011-09-26T05:41:02.495-04:002011-09-26T05:41:02.495-04:00Adding on to Anonymous' comment, Lucas is pull...Adding on to Anonymous' comment, Lucas is pulling expectations out of his hat to justify what's happening. The prospect of Obamacare apparently destroys the US economy. And since this was only passed in (IIRC) fall 2009, it was working for a couple of years by that point.<br /><br />Adding on your example of Lucas not understanding which countries have higher/lower tax rates and working hours, a better explanation is that he just makes sh*t up.Barry DeCiccohttps://www.blogger.com/profile/04735814736387033844noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-75556120005290564362011-09-26T01:23:28.170-04:002011-09-26T01:23:28.170-04:00Another thing on the "they're afraid of t...Another thing on the "they're afraid of the big socialist job killer at 1600 Penn. Avenue" line: the trend of strong growth after recessions presumably isn't only a US thing. How could this "FOO" theory as Krugman calls it explain challenges in Europe?<br /><br />Also, technically, America lines up pretty well with financial crises data. <br /><br /><br />http://dallasfed.org/research/eclett/2011/el1109.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81649736362437654672011-09-26T01:19:07.643-04:002011-09-26T01:19:07.643-04:00@Claudia:
Very interesting. Yeah, I agree.@Claudia:<br /><br />Very interesting. Yeah, I agree.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-31919432464913947982011-09-25T23:50:59.188-04:002011-09-25T23:50:59.188-04:00I would argue that we can measure expectations (al...I would argue that we can measure expectations (albeit imperfectly). And I would think a modern macroeconomist like Lucas would be concerned about an apparent break in households' income expectations (for example as appears in the Michigan survey since the fall of 2008). Inflation expectations are not the only expectations that can be self-fulfilling.Claudia Sahmhttps://sites.google.com/site/claudiasahm/noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6296155024877013622011-09-25T23:11:14.885-04:002011-09-25T23:11:14.885-04:00"[E]ven at his age, he shows a great deal of ..."[E]ven at his age, he shows a great deal of nuance and skepticism."<br /><br />You think? I tend to think it's faux-objectivity. Kind of like: "Krugman is a brilliant economist, but he's partisan" - the people who say this aren't really being fair and they're not really addressing substance; they're using the compliment to prop up the ad hominem attack. <br /><br />That's what this strikes me as. A bunch of faux-modesty and faux-objectivity being used to prop up claims for which there is NO factual support.<br /><br />If you think of the world in terms of Siths and Jedis (and I usually do...:)), Lucas is the Emperor.<br /><br />http://plutocracyfiles.blogspot.com/2011/09/keynes-and-holy-trilogy.htmlTaryn Harthttp://plutocracyfiles.blogspot.comnoreply@blogger.com