via BBC News – Viewpoint: Greece should default and abandon the euro.
Greece should default and abandon the euro – Jeff Miron
27 Jan 2015 Leave a comment
in budget deficits, currency unions, development economics, economic growth, economic history, Euro crisis, fiscal policy, global financial crisis (GFC), growth disasters, law and economics, macroeconomics, poverty and inequality Tags: currency unions, Euroland, Greece, optimal currency area, sovereign default
The competing visions of stabilisation policy have been defined by Franco Modigliani and Milton Friedman
26 Jan 2015 Leave a comment
in business cycles, economics of information, history of economic thought, macroeconomics, Milton Friedman, monetarism, monetary economics Tags: Franco Modigliani, Keynes in macroeconomics, monetary policy, stabilisation policy, The fatal conceit, The pretence to knowledge
Has the USA moved to lower trend GDP growth path?
26 Jan 2015 Leave a comment
in business cycles, economic growth, great recession, macroeconomics, politics - USA Tags: great recession, Jagadeesh Gokhale, prosperity and depression
The Greek depression compared
26 Jan 2015 Leave a comment
Robert Lucas interview in Brazil, 2nd November 2012
24 Jan 2015 Leave a comment
in applied welfare economics, business cycles, comparative institutional analysis, development economics, economic growth, global financial crisis (GFC), great recession, growth disasters, growth miracles, inflation targeting, macroeconomics, monetarism, Robert E. Lucas Tags: Robert E. Lucas
Paul Samuelson and Robert Lucas both agree that economists have solved the problem of economic depressions
24 Jan 2015 Leave a comment
in business cycles, fiscal policy, great depression, great recession, history of economic thought, macroeconomics, monetary economics, Robert E. Lucas Tags: Paul Samuelson, prosperity and depression, The fatal conceit, The pretence to knowledge
Milton Friedman on the lessons of the East Asian financial crisis (and Switzerland going off its peg)
24 Jan 2015 Leave a comment
On the role of R&D and boffins in lab coats in the Industrial Revolution
24 Jan 2015 Leave a comment
Hsieh and Moretti on Allocations across Cities
23 Jan 2015 Leave a comment
in applied price theory, applied welfare economics, economics of regulation, geography, law and economics, politics - New Zealand, politics - USA, rentseeking, urban economics Tags: agglomeration, green rent seeking, land supply, zoning
the implied cost of housing restrictions across the whole U.S., and Chang and Enrico find that aggregate output is lower by about 10-14% because of them.
Last post on the NBER growth session. Chang-Tai Hsieh (Chicago) and Enrico Moretti (Berkeley) presented a paper on wage dispersion across cities in the U.S. Wage dispersion (New Yorkers earn more than people in Cleveland) either represents compensation for living costs (housing in New York is more expensive than in Cleveland), a real difference in productivity (New Yorkers are more productive than Clevelanders), or some combination of the two.
What Chang and Enrico find is that the increase in wage dispersion across cities in the U.S. over the last thirty-ish years is due almost entirely to rising house prices in six cities: NY, DC, Boston, San Fran, San Jose, and Seattle. Wages have gone up rapidly in those cities, but that is basically just compensating their citizens for the higher costs of living.
Now, given the costs of living, the allocation of population across cities in the U.S. is…
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Robert Lucas on the defining belief of the Left over Left and the Greens
23 Jan 2015 Leave a comment
The Golden Rule, John Rawls and just saving for the future generations
22 Jan 2015 Leave a comment
in economic growth, macroeconomics Tags: Edmund Phelps, Golden rule of savings, intergenerational equity, John Rawls, just savings
Why is the Left so keen to tax the rich of today, which reduces investment, but through this concerns about sustainable development, not tax the rich of the next generation by leaving them a smaller capital stock?
Rawls proposes a principle of just savings. Rawls suggests that each generation puts itself in the place of the next, and asks what it could reasonably expect to receive.
Currently living people have a justice-based reason to save for future people only if such saving is necessary for allowing future people to reach the sufficientarian threshold as specified. This is known as the accumulation stage.
Once just institutions are securely established — this is known as the steady-state stage — justice does not require people to save for future people. Rawls also holds that, in that second stage, people ought to leave their descendants at least the equivalent of what they received from the previous generation.
Edmund Phelps developed a Golden Rule in the 1960s that suggests that it is possible to save and invest too much. Phelps also generated the result that the savings rate can be too high:
The basic significance of the golden rule is as a warning against national policies of over-saving or counterproductive austerity.
Economic Rebounds in U.S. and Euro Zone: Deceivingly Similar, Strikingly Different
20 Jan 2015 Leave a comment
in business cycles, Euro crisis, global financial crisis (GFC), great recession, labour economics, macroeconomics, unemployment Tags: Euroland
via Economic Rebounds in U.S. and Euro Zone: Deceivingly Similar, Strikingly Different – Dallas Fed.
Utopia, you are standing in it! 
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