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The idea of crowding out mentioned here appears to have made some uncomfortable. On the face of it, people may feel that this sort of conclusion would mean that I agree with this sort of statement from Neil Ferguson (I don’t): You can’t be a monetarist and a Keynesian simultaneously—at least I can’t see how […]
Many economists are becoming increasingly technocratic in their desire to shape the economy to fit their favourite theory. However, behind their desire to improve the lot of their compatriots looms the shadow of public choice theory, scorning their efforts to shape public debate. Indeed, many libertarians are so persuaded by public choice ideas that they […]
John Quiggin has re-opened the fiscal multiplier debate to advocate for fiscal stimulus. Quiggin, along with others such as Krugman, Summers and DeLong, and Blanchard claim that the effect of government spending on production will be greater than the government’s initial injection. The empirical evidence they use tends to rely on cross-country regressions, although some […]
As a general rule of thumb, whenever someone offers you something for nothing they aren’t telling you the full story – and that is exactly what we have with the Greens stating the Reserve Bank should start rebuilding Christchurch themselves by printing money. Now, in order to come to this conclusion a bunch of points […]
Following the Jackson Hole speeches there was this post over at Uneasy Money. The money section for me is: The reductions in long-term interest rates reflect not the success of QE, but its failure. Why was QE a failure? Because the only way in which QE could have provided an economic stimulus was by increasing […]
With the unemployment rate coming in at 6.8% in the June quarter, the unemployment rate has been “persistently high”. There are three broad mechanisms we can “blame”this on: A “supply shock” across the economy (eg high fuel prices, financial crisis) A requirement for a reorganisation in the skills needed in the labour market (eg the […]