Paul Krugman - Deleveraging - "The situation: over the past decade, households ran up what is almost universally regarded as an excessive amount of debt — shown here for the United States, but also in the UK, Spain, and elsewhere. They are now being forced to pay down that debt by cutting spending.
The question is, what will replace their spending? We’re told that we can’t have fiscal expansion, because that’s Big Government. And now we’re being told that we can’t have monetary expansion, which might induce businesses and low-debt consumers to spend more, because that’s debasing the dollar. Oh, and while we’re on that, we can’t allow the dollar to fall, which might help exports."
Ben Bernanke (2002) - Tax cuts - "A pledge by the Fed to keep the Treasury's borrowing costs low, as would be the case under my preferred alternative of fixing portions of the Treasury yield curve, might increase the willingness of the fiscal authorities to cut taxes."
Scott Sumner - Open letter to fellow conservatives
Brad DeLong - What is wrong with American macroeconomics? - "What is wrong with American macroeconomics? In a nutshell, when 2007-9 came along every single macro textbook (including mine) and every single macro course (save possibly Perry Mehrling's) was of little or no use in helping people who had read or taken them to read publications like the FT as they chronicled the downturn or understand the policy debates hosted by the FT.
At the very minimum, a macro course should teach people enough about the macroeconomy that they can then read the reporting of the FT. And it should teach people enough about the theoretical approaches that underpin policy advocacy that they can then understand and evaluate the policies proposed in contributions to the FT.
What would such a macroeconomics course look like?
It would, I think, teach the five still-live theories of the causes of economic downturns that underpin people's analyses. <..>
All five of these theories are best taught sympathetically by being taught historically: as long traditions of thought that smart people have used to try to understand a changing and confused world. Thus Minskyism from its nineteenth century roots with Walter Bagehot or perhaps Adam Smith grappling with nineteenth-century financial crises, Keynesianism from its roots in Knut Wicksell's studies of disturbances to the flow-of-funds, monetarism from its roots in John Stuart Mill trying to understand the first industrial downturn in England in 1825, overinvestment theories from their roots in Karl Marx grappling with the crisis of 1848, high-real-wage from its roots in Nassau Senior's examinations of technological unemployment in the pre-1850 Midlands--all tussling with a set of problems first raised by Jean-Baptiste Say and Thomas Robert Malthus.
That would be a macro course that would turn out graduates who could read the FT--and who would be of great value to all the employers who need people to process information from the FT."
Bill Woolsey - Why are many free market economists so critical of the Fed's proposed quantitative easing?
David D. Friedman - Sustainability - "Generalizing the point, "sustainability" becomes an argument against whatever policies one disapproves of, in favor of whatever policies one approves of, and adds nothing beyond a rhetorical club with which partisans can beat on those who disagree with them."
BBC Video - Fund manager Hugh Hendry vs. politicians and audience
Cartoon - QE2, Hayek and Scott Sumner
"If money isn't loosened up, this sucker could go down" - George W. Bush warned in September 2008
Monday, November 22, 2010
Really good links - Deleveraging - Bernanke and tax cuts - Pain caucus - Causes of economic downturns - Critics of QE2 - Sustainability - Hugh Hendry video
Posted by themoneydemand.blogspot.com at 8:03 AM