Hayek (1950) on why the current stimulus will fail

Fama in full on fiscal policy

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Fama on a fiscal stimulus

From https://famafrench.dimensional.com/essays/bailouts-and-stimulus-plans.aspx

Paul Samuelson on where he disagreed with Milton Friedman on macroeconomic policy

Paul Samuelson on where he disagreed with Milton Friedman

via Samuelson vs. Friedman, David Henderson | EconLog | Library of Economics and Liberty and An Interview With Paul Samuelson, Part One — The Atlantic.

Deflation and Depression: Is There an Empirical Link?

Deflation has a bad reputation. People blame deflation for causing the great depression in the 1930s. What worse reputation can you get as a self-respecting macroeconomic phenomena?

The inconvenient truth for this urban legend is empirical evidence of deflation leading to a depression is rather weak.

The most obvious is confounding evidence, is up until the great depression, deflation was commonplace. In the late 19th century, deflation coincided with strong growth, growth so strong that it was called the Industrial Revolution.

For deflation to be a depressing force, something must have happened in the lead up to the Great Depression to change the impact of deflation on economic growth.

Atkeson and Kehoe in the AER looked into the relationship between deflation and depressions and came up empty-handed.

Deflation and depression do seem to have been linked during the 1930s. But in the rest of the data for 17 countries and more than 100 years, there is virtually no evidence of such a link.

 

Analyse Economique

Deflation and Depression: Is There an Empirical Link?

Andrew Atkeson, and Patrick J. Kehoe, 2004.

Are deflation and depression empirically linked? No, concludes a broad historical study of inflation and real output growth rates. Deflation and depression do seem to have been linked during the 1930s. But in the rest of the data for 17 countries and more than 100 years, there is virtually no evidence of such a link.

View original post 1,842 more words

Earl A. Thompson on fiscal and monetary policy in the Great Recession

 

Krugman explains why a broken window is a fiscal stimulus

HT: Robert P. Murphy

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The broken window fallacy explained

Joseph Schumpeter on John Keynes

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Keynesian analysis implicitly assumes that a fiscal deficit does not have any effects on other spending

The

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