via Samuelson vs. Friedman, David Henderson | EconLog | Library of Economics and Liberty and An Interview With Paul Samuelson, Part One — The Atlantic.
Paul Samuelson on where he disagreed with Milton Friedman on macroeconomic policy
19 Mar 2015 Leave a comment
in budget deficits, business cycles, economic growth, fiscal policy, inflation targeting, macroeconomics, Milton Friedman, monetarism, monetary economics Tags: fiscal policy, monetary policy, Paul Samuelson, rules versus discretion, stabilisation policy
Deflation and Depression: Is There an Empirical Link?
31 Jan 2015 Leave a comment
in budget deficits, business cycles, economic growth, Euro crisis, great depression, great recession, macroeconomics, monetary economics, politics - Australia, politics - New Zealand, politics - USA Tags: deflation, fiscal policy, liquidity traps, monetary policy, stabilisation policy
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.
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.
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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
Utopia, you are standing in it! 
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