Macroeconomics: Listening to Reality: A Note from Twitter I Want to Save

.@MikePMoffatt: Things like this have raised and greatly sharpened my estimate of current ZLB fiscal multiplier: http://delong.typepad.com/sdj/2015/01/over-at-equitable-growth-yes-the-past-four-years-are-powerful-evidence-for-the-keynesian-view-of-what-happens-at-the-zero-l.html

Since 2007, reality has spoken.

Since 2007, reality has raised my estimate of the U.S. fiscal multiplier from 1.5 to 2.5, and sharpened it. Since 2007, reality has raised my estimate of the U.S. debt capacity from 75% of a year’s GDP to >150%. Since 2007, reality has left my very fuzzy estimate that the effects of QE are small unchanged.

Now Scott Sumner says 2013-14 a huge surprise that should have shifted my estimates again, substantially. And I really do not see why...

.@cellsatwork: There’s an extended substantive pre-response [by Krugman to Sumner]:

http://krugman.blogs.nytimes.com/2015/01/06/the-record-of-austerit
http://krugman.blogs.nytimes.com/2015/01/07/professors-politicians-and-moments-of-truth
http://krugman.blogs.nytimes.com/2015/01/21/euroblunders
http://krugman.blogs.nytimes.com/2015/01/22/how-super-was-mario-wonkish.

Sumner doesn't seem to have read any of it...