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Category Archive for 'Macroeconomics'

Many of you are well aware of the Keynesian push for boosting aggregate demand when an economy is slumping. Indeed, we rarely are told when the economy is doing well enough to not need a shot in the arm. That suits many of our political biases. So, I ask this question in all seriousness. Don’t […]

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Pondering Government Spending

I’m too lazy to extract the data, but roughly speaking, in the mid-1950s, the federal government spent between 17% and 20% of GDP.  Of that percentage, between 80% to 85% of that spending was discretionary. What this means in an 8th grade sort of way was that there was lots of money to quibble over and to […]

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This finding, while not surprising, is hard for me to square with the Political Economy we live in: On the Distribution of the Welfare Losses of Large Recessions by Dirk Krueger, Kurt Mitman, Fabrizio Perri  –  NBER WP#22458 How big are the welfare losses from severe economic downturns, such as the U.S. Great Recession? How […]

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In revisiting my class discussions on the economics of public goods, I came across a paper from the OECD that incredibly I had never been aware of. One of the major results in the paper is shocking. Now the sample size, as with all cross-country analyses, is small, and there are the usual caveats about […]

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Does anyone actually store money under their mattress?

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Roger Farmer is Worried

I don’t have a pony in this race aside from the fact that I don’t want to live through a Great Depression: If we do not act, and act soon, we are headed for another Great Depression. Yikes.

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Priceless

Tim Taylor talks about Keynes’ view on secular stagnation, investment and the government’s role in managing aggregate demand: Keynes begins by stating: “It seems to be agreed to-day that the maintenance of a satisfactory level of employment depends on keeping total expenditure (consumption plus investment) at the optimum figure … The problem of maintaining full […]

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This result was surprising, sure to get lots of news coverage: It shows that despite a rise in measured capital-labor ratios, labor-augmenting technical change in the US has been sufficiently rapid that effective capital-labor ratios have actually fallen in the sectors and industries that account for the largest portion of the declining labor share in income since 1980 Paper […]

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At least I admit it. So I’ve heard people with a professed Keynesian bent argue that we should end the idea of “tax cuts for the rich.” Fine, I suppose. But I’ve even heard this uttered during recessions, including the time from 2007 right up through today. I am not making this up so far, […]

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GDP = National Income. It is argued that GDP is not a reliable measure of well-being. I agree. Therefore income is not a reliable measure of well-being. Therefore income inequality is not a reliable measure of the distribution of well-being. And before you jump into my tribal pool, this could very well mean that well […]

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