DeLong Smackdown Watch: Xavier Gabaix Explains "Tail Risk"

The tail risk that Xavier Gabaix sees is the risk that the government will adopt Pain Caucus policies:

Economics: It is a rational (but problematic) reaction to "tail risk. A rejoinder | The Economist: I GREATLY enjoy DeLong’s writings, and find them abundant in information and insights, if not in interpretive charity. His reaction suggests I should clarify my compact post. Of course macroeconomic tail risk includes a potential financial crisis—who wouldn’t think that? I had in mind the...