J. Bradford DeLong's Blog, page 283

DeLong Fall 2018 Teaching Schedule

Email delong@econ.berkeley.edu for an appointment outside of office hours...

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https://www.icloud.com/numbers/0fSxKotxqSU27JCPbCUVOXLdg

The first news: FiveThirtyEight's forecast goes from H+36...

The first news: FiveThirtyEight's forecast goes from H+36 S-1 to H+42 S+0: FiveThirtyEight: 2018 Election: Live Coverage And Results:

#acrossthewidemissouri #politics

Lyndon Johnson: "I can think of nothing more dangerous, m...

Lyndon Johnson: "I can think of nothing more dangerous, more divisive, or more self-destructive than the effort to prey on what is called 'white backlash.' I thought it was a mistake to pump this issue up in the 1964 campaign, and I do not think it served the purpose of those who did. I think it is dangerous because it threatens to vest power in the hands of second-rate men whose only qualification is their ability to pander to other men's fears. I think it divides this nation at a very critical time���and therefore it weakens us as a united country...

...I think that the so-called 'white backlash' is destructive, not only of the interests of Negro Americans, but of all those who stand to gain from humane and farsighted government. And those that stand to gain from humane and farsighted government is everybody. Nevertheless, there are those who try to stimulate suspicion into hatred, and to make fear and frustration their springboard into public office. Many of them do it openly. Some let their henchmen do it for them. Their responsibility is the same. Racism���whether it comes packaged in the Nazi's brown shirt or a three-button suit���destroys the moral fiber of a nation. It poisons public life. So I would urge every American to ask himself before he goes to the polls on Tuesday: Do I want to cast my vote on the basis of fear? Do I want to follow the merchants of bigotry?...

#shouldread #politics #orangehairedbaboons #history

NOTEBOOK: Milken Review Pieces

https://www.icloud.com/pages/0XNd1dK_PMGXP7kdGN1OyeQsQ

http://www.typepad.com/site/blogs/6a00e551f08003883400e551f080068834/post/6a00e551f080038834022ad351dbb5200c/edit

http://www.typepad.com/site/blogs/6a00e551f08003883401b8d2c935d5970c/page/6a00e551f080038834022ad351dbd0200c/edit?saved_added=n

Was the Great Recession More Damaging Than the Great Depression? http://www.milkenreview.org/articles/was-the-great-recession-more-damaging-than-the-great-depression
When Globalization is Public Enemy Number One http://www.milkenreview.org/articles/when-globalization-is-public-enemy-number-one
Helicopter Money: When Zero Just Isn���t Low Enough http://www.milkenreview.org/articles/helicopter-money-when-zero-just-isnt-low-enough
The Scary Debate Over Secular Stagnation http://www.milkenreview.org/articles/the-scary-debate-over-secular-stagnation
The Next Industrial Revolution?: Information Technology Makes a Difference���Finally https://assets1b.milkeninstitute.org/assets/Publication/MIReview/PDF/16-22mr5.pdf
The Shadow of 2008 http://www.bradford-delong.com/2018/06/peter-passell-the-great-recession-04-the-post-2008-great-recession-now-casts-a-bigger-shadow-this-year-2018-will.html





Globalization in the Crosshairs http://www.milkeninstitute.org/videos/view/globalization-in-the-crosshairs
Technology and Jobs: Should Workers Worry? http://economistsview.typepad.com/economistsview/2015/04/video-technology-and-jobs-should-workers-worry.html

Nathaniel Rakich: How To Watch The Midterms: An Hour-By-H...

Nathaniel Rakich: How To Watch The Midterms: An Hour-By-Hour Guide: "6 p.m.: Polls close in: most of Indiana, eastern Kentucky. As the first polls close, we���ll start to see results in two districts that could hold clues for how the rest of the night will unfold: the Kentucky 6th and Indiana 9th. The Kentucky 6th is rated1 as Toss-Up in the Classic version of our model. If Democratic challenger Amy McGrath is able to oust GOP Rep. Andy Barr, it will be an early sign of a Democratic wave, as the Kentucky 6th is about 10.5 points more Republican-leaning than the nation as a whole, according to FiveThirtyEight���s partisan lean metric. On the other hand, our model rates the Indiana 9th as Likely Republican, so if Democrat Liz Watson somehow pulls off an upset against Republican Rep. Trey Hollingsworth, it may point to a very long night for Republicans. The 6 p.m. poll-closing hour will also yield early returns in the Indiana U.S. Senate race, a seat that Democrats must hold in order to have any hope of capturing the Senate. Democratic Sen. Joe Donnelly currently has a 7 in 10 chance there...

...7 p.m.: Polls close in: most of Florida, Georgia, the rest of Indiana, the rest of Kentucky, most towns in New Hampshire, South Carolina, Vermont, Virginia: Florida and Georgia are hosting two of the most interesting gubernatorial campaigns.... In the House, we���ll see results from districts like the Florida 27th and Virginia 10th, both of which look like easy pickup opportunities for Democrats. But if Republicans hold on to these seats, that may mean they have a shot at hanging on to the House. There are also several toss-up districts at stake, like the Florida 26th and Virginia 5th....

7:30 p.m.: Polls close in: North Carolina, Ohio, West Virginia.... North Carolina and Ohio are two states where a blue tsunami could break open the Republican firewall; if that happens, look for likely-but-not-safe Republican districts like the North Carolina 2nd and Ohio 1st to fall.... By this point, we should hopefully be able to see a pattern emerging in the Senate.....

8 p.m.: Polls close in: Alabama, Connecticut, Delaware, the rest of Florida, Illinois, most of Kansas, Maine, Maryland, Massachusetts, most of Michigan, Mississippi, Missouri, the rest of New Hampshire, New Jersey, some counties in North Dakota, Oklahoma, Pennsylvania, Rhode Island, eastern South Dakota, most of Texas, Tennessee. If you manage to keep track of everything up to this point on election night, this is where it will all go to pot.... The Senate could also be decided in this time block, with three of the four likeliest tipping-point states reporting results starting at 8 p.m. Two of the most vulnerable Democratic Senate incumbents, according to our model, reside in Missouri and North Dakota.... Finally, the gubernatorial-results dam will break, too: Connecticut, Illinois, Kansas, Maine, Michigan, New Hampshire, Oklahoma and South Dakota are all potentially in play, although in every state but Kansas, our model has identified a clear favorite....

9 p.m.: Polls close in: Arizona, Colorado, Louisiana, the rest of Kansas, the rest of Michigan, Minnesota, Nebraska, New Mexico, New York, the rest of North Dakota, the rest of South Dakota, the rest of Texas, Wisconsin, Wyoming: My guess is that this is the hour when we���ll know if Democrats will win the House (or at the very least, if they���re on track to do so). Returns from districts like the Arizona 2nd, Colorado 6th, Minnesota 2nd and Minnesota 3rd will answer the question of whether Democrats were able to close the deal in their easiest pickup opportunities.... For the Senate, all eyes will be on Arizona, where Rep. Kyrsten Sinema has a 3 in 5 chance of picking up a seat for Democrats....

10 p.m.: Polls close in: southern Idaho, Iowa, Montana, Nevada, part of one county in Oregon, Utah. The battle for the Senate should conclude in the 10 p.m. hour as results from the last of the competitive Senate races come in....

11 p.m.: Polls close in: California, Hawaii, the rest of Idaho, the rest of Oregon, Washington. Other than a potential Republican upset of Gov. Kate Brown in Oregon, the focus in these states will be entirely on the House. Even if control of the House is decided without them, it will still be important to watch districts like the California 39th and 45th as test cases for whether well-heeled Republicans will vote for someone with a ���D��� next to their name...

#shouldread #politics

Seminar: James Cloyne: Taxes and Growth: New Narrative Ev...

Seminar: James Cloyne: Taxes and Growth: New Narrative Evidence from Interwar Britain: James Cloyne, Nicholas Dimsdale, and Natacha Postel-Vinay: Taxes and Growth: New Narrative Evidence from Interwar Britain: "The impact of fiscal policy on economic activity is still a matter of great debate. And, ever since Keynes first commented on it, interwar Britain, 1918-1939, has remained a particularly contentious case, not least because of its high debt environment and turbulent business cycle...

...This debate has often focused on the effects of government spending, but little is known about the effects of tax changes. In fact, a number of tax reforms in the period focused on long-term and social objectives, often reflecting the personality of British Chancellors. Based on extensive historiographical research, we apply a narrative approach to the interwar period in Britain and isolate a new series of exogenous tax changes. We find that tax changes have a sizable effect on GDP, with multipliers around 0.5 on impact and exceeding 2 within two years. Our estimates contribute to the historical debate about fiscal policy in the interwar period and are remarkably similar to the sizable tax multipliers found after WWII...

#shouldread #economichistory #fiscalpolicy #monetaryeconomics

Weekend Reading: Keynes Quoting Malthus

John Maynard Keynes: The General Theory of Employment, Interest and Money: "The doctrine did not reappear in respectable circles for another century, until in the later phase of Malthus the notion of the insufficiency of effective demand takes a definite place as a scientific explanation of unemployment. Since I have already dealt with this somewhat fully in my essay on Malthus, it will be sufficient if I repeat here one or two characteristic passages...

...We see in almost every part of the world vast powers of production which are not put into action, and I explain this phenomenon by saying that from the want of a proper distribution of the actual produce adequate motives are not furnished to continued production. ... I distinctly maintain that an attempt to accumulate very rapidly, which necessarily implies a considerable diminution of unproductive consumption, by greatly impairing the usual motives to production must prematurely check the progress of wealth.... But if it be true that an attempt to accumulate very rapidly will occasion such a division between labour and profits as almost to destroy both the motive and the power of future accumulation and consequently the power of maintaining and employing an increasing population, must it not be acknowledged that such an attempt to accumulate, or that saving too much, may be really prejudicial to a country?

The question is whether this stagnation of capital, and subsequent stagnation in the demand for labour arising from increased production without an adequate proportion of unproductive consumption on the part of the landlords and capitalists, could take place without prejudice to the country, without occasioning a less degree both of happiness and wealth than would have occurred if the unproductive consumption of the landlords and capitalists had been so proportioned to the natural surplus of the society as to have continued uninterrupted the motives to production, and prevented first an unnatural demand for labour and then a necessary and sudden diminution of such demand. But if this be so, how can it be said with truth that parsimony, though it may be prejudicial to the producers, cannot be prejudicial to the state; or that an increase of unproductive consumption among landlords and capitalists may not sometimes be the proper remedy for a state of things in which the motives to production fails?

Adam Smith has stated that capitals are increased by parsimony, that every frugal man is a public benefactor, and that the increase of wealth depends upon the balance of produce above consumption. That these propositions are true to a great extent is perfectly unquestionable.... But it is quite obvious that they are not true to an indefinite extent, and that the principles of saving, pushed to excess, would destroy the motive to production. If every person were satisfied with the simplest food, the poorest clothing and the meanest houses, it is certain that no other sort of food, clothing, and lodging would be in existence.... The two extremes are obvious; and it follows that there must be some intermediate point, though the resources of political economy may not be able to ascertain it, where, taking into consideration both the power to produce and the will to consume, the encouragement to the increase of wealth is the greatest.

Of all the opinions advanced by able and ingenious men, which I have ever met with, the opinion of M. Say, which states that: un product consomm�� ou d��truit est un d��bouch�� ferm�� (I. i. ch. 15), appears to me to be the most directly opposed to just theory, and the most uniformly contradicted by experience. Yet it directly follows from the new doctrine, that commodities are to be considered only in their relation to each other���not to the consumers. What, I would ask, would become of the demand for commodities, if all consumption except bread and water were suspended for the next half-year? What an accumulation of commodities! Quels d��bouch��s! What a prodigious market would this event occasion![39]

Ricardo, however, was stone-deaf to what Malthus was saying. The last echo of the controversy is to be found in John Stuart Mill���s discussion of his Wages-Fund Theory, which in his own mind played a vital part in his rejection of the later phase of Malthus, amidst the discussions of which he had, of course, been brought up. Mill���s successors rejected his Wages-Fund Theory but overlooked the fact that Mill���s refutation of Malthus depended on it. Their method was to dismiss the problem from the corpus of Economics not by solving it but by not mentioning it. It altogether disappeared from controversy. Mr. Cairncross, searching recently for traces of it amongst the minor Victorians, has found even less, perhaps, than might have been expected. Theories of under-consumption hibernated until the appearance in 1889 of The Physiology of Industry, by J. A. Hobson and A. F. Mummery...

#shouldread #historyofeconomicthought #keynes #malthus #aggregatedemand

Weekend Reading Jan Christian Smuts to M.C. Gillett: The Griqua prayer...

Jan Christian Smuts: To M. C. Gillett, Paris, 7 May 1919...

...No, I cannot come over this week-end as I must stop here at this juncture for a few days longer on the off-chance of being useful. I go today in a frock-coat and top hat to join in handing the Germans our so-called Peace Terms. And my mind will go back to another May day in 1902 when Peace Terms were handed to the Boers. And in less than five years those terms had been blown to smithereens by fate and only the semblance of the British flag remained as a reminder of the victors' terms.

And so it may be again. Let us not lose faith in God, the Disposer of things, and in simple human nature which is so much wiser and braver than what one would infer from the activities of the statesmen and the leaders. I often nowadays
have the feeling as if some great Spirit is back of things and quietly moving the pieces of history behind the camouflage of our petty stage. So let us have faith and await the greater issue, which, however, may not be in our day.

What a striking reference you made in your last to the anti-Corn Law agitation. I told Keynes what you had written and he said how true it was and he had never thought of it in that way. Poor Keynes often sits with me at night after a good
dinner and we rail against the world and the coming flood. And I tell him this is the time for the Griqua prayer (the Lord to come himself and not send his Son, as this is not a time for children). And then we laugh, and behind the laughter is Hoover's terrible picture of thirty million people who must die unless there is some great intervention. But then again we think things are never really as bad as that; and something will turn up, and the worst will never be. And somehow all these phases of feeling are true and right in some sense.

And in it all I do miss you, miss you greatly. How you and Arthur and I would talk things over if we were together. But complete Holism is not yet; time and space are terrible facts; and so we submit for the present and await our turn of good times. And thank you for the Message to Seekers. I have the original as my book-mark in Spinoza which I am again reading.

There is spring in the air and spring in the world, both inner and outer; may spring come soon to the distracted races of
men.

Ever yours,

Jan

#weekendreading

I have never believed the critics of Whorfianism���those ...

I have never believed the critics of Whorfianism���those who claim that the language you speak does not shape what you see and how you think. Non-native speakers have a very hard time even hearing the native phonemes of a language, so how can their thoughts be unaffected? Linguistic sources of gender essentialism: Pamela Jakiela and Owen Ozier: Gendered Language: "At the cross-country level, this paper documents a robust negative relationship between the prevalence of gender languages and women���s labor force participation...

...It also shows that traditional views of gender roles are more common in countries with more native speakers of gender languages. In African countries where indigenous languages vary in terms of their gender structure, educational attainment and female labor force participation are lower among those whose native languages
are gender languages. Cross-country and individual-level differences in labor force participation are large in both absolute and relative terms (when women are compared to men), suggesting that the observed patterns are not driven by development or some unobserved aspect of culture that affects men and women equally. Following the procedures proposed by Altonji, Elder, and Taber (2005) and Oster (2017), this paper shows that the observed correlations are unlikely to be driven by unobservables...

#shouldread

Was the Great Recession More Damaging Than the Great Depression?: Over at the Milken Review

Was the Great Recession More Damaging Than the Great Depression?: ...Your parents������more likely your grandparents������Great Depression opened with the then-biggest-ever stock market crash, continued with the largest-ever sustained decline in GDP, and ended with a near-decade of subnormal production and employment. Yet 11 years after the 1929 crash, national income per worker was 10 percent above its 1929 level. The next year, 12 years after, it was 28 percent above its 1929 level. The economy had fully recovered. And then came the boom of World War II, followed by the ���thirty glorious years��� of post-World War II prosperity. The Great Depression was a nightmare. But the economy then woke up���and it was not haunted thereafter.

Our ���Great Recession��� opened in 2007 with what appeared to be a containable financial crisis. The economy subsequently danced on a knife-edge of instability for a year. Then came the crash ��� in stock market values, employment and GDP. The experience of the Great Depression, however, gave policymakers the knowledge and running room to keep our depression-in-the-making an order of magnitude less severe than the Great Depression. That���s all true. But it���s not the whole story. The Great Recession has cast a very large shadow on America���s future prosperity. We are still haunted by it... Read MOAR at Project Syndicate

#shouldread #greatrecession #greatdepression #macroeconomics #economichistory