Paul Krugman's Blog, page 622

A few days off

No column tomorrow, and limited posting until late in the week. I'll be hiking the Applalachian Trail

Summers at IIE

The speech Larry Summers gave at the IIE was sensible and clear-headed. But his discussion of the stimulus and its size was disappointing - and, I hope, somewhat disingenuous.
What Larry said:
The size of the stimulus reflected a balance of several considerations: the size of the likely output gap that the economy was facing, the difficulties [...:]

Beware the bounce

The really terrible numbers earlier this year had a lot to do with inventories: businesses decided they had too much stuff in warehouses, so they slashed production well below final sales. Correspondingly, the green shoots we're seeing are to an important extent the result of the end of this de-stocking process.
The question is, how much [...:]

The six deadly hypocrites

Will the destructive center kill health care reform? It looks all too possible.
What's especially galling is the hypocrisy of their claimed reason for delaying progress - concern about the fiscal burden. After all, in the past most of them have shown no concern at all for the nation's long-term fiscal outlook.
Case in point: the Medicare [...:]

Views differ on shape of macroeconomics

I'll mostly weigh in on Brad DeLong's side with regard to this Economist piece on the state of macroeconomics. The Economist reaches, I think, for a false symmetry, and glosses over too easily the sheer ignorance that has become obvious in the debates over fiscal policy.
On the other hand, the common claim that economists [...:]

Who coined the term "macroeconomics"?

The Economist sez the term first appeared in the journals in a 1945 article by Jacob Marschak. But according to an authoritative source - Krugman and Wells - the term was coined in 1933 by Ragnar Frisch.

Opinions for sale

Politico has a scoop:
The American Conservative Union asked FedEx for a check for $2 million to $3 million in return for the group's endorsement in a bitter legislative dispute, then flipped and sided with UPS after FedEx refused to pay.
For the $2 million plus, ACU offered a range of services that included: "Producing op-eds and [...:]

Anti-American

For some reason Princeton Township is demolishing the bridge that takes Rosedale Road over Stony Brook. This happens to be a huge inconvenience, adding miles to my trip into the office (and creating major traffic jams along the route, because I'm not the only person forced into a detour.) But that's not what struck me [...:]

More multipliers (double super wonkish)

I've been thinking a bit more about contrasting results about fiscal multipliers in different New Keynesian models. Here are some further thoughts:

The simplest NK model is one in which there's only consumption, no investment, and in which there's a one-period "short run" in which prices are fixed, followed by an infinite-horizon long run of flexible [...:]

Winning the narrative

Yesterday I had a conversation with someone who, like me, spent most of the Bush years as a voice in the wilderness. And he pointed out something remarkable: although those of us who said the obvious - that the Bush administration was fundamentally monstrous - were ridiculed by all the respectable people at the time, [...:]