Brad DeLong weighs in on Reinhart and Rogoff.
Project Syndicate
When Is Government Debt Risky?
J. Bradford DeLong | Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau for Economic Research
(h/t Ralph Musgrave via email)
9 comments:
These debates have become very tiresome. DeLong is trying to respond to the critique of RR by hanging on to the mainstream consensus basic model with minimal adjustment, while accepting that they made errors in causal inference and the application of the model to data.
The fundamentally conservative, post-1989, end-of-history neoliberalism DeLong is associated with is on the verge of being swept aside by the next wave of global activism. Delong is one of the main figures of a center-left bloggy in-clique of neoliberal back-scratchers that includes Klein and Yglesias. But Yglesias just jumped the shark with his Bangladesh nonsense.
Here's the new Italian Prime Minister Enrico Letta: "The port we are sailing towards is called the United States of Europe. Our ship is democracy."
After four years of profound policy failure and moral ugliness, Europe is on the cusp of making changes that, while they might appear modest at first, are going to liberate Europe's young people from the weight of hopelessness and impossibility that has been grinding them down.
In five years, no one is going to care about the degenerating research program of academic neoliberalism with its futile epicycles.
I don't understand DeLong. He begins with typical fear mongering, but then sort of loosens up toward the end. And he does know about MMT. He gave a talk at UMKC recently.
It's like he's applying for a position in a neoliberal Democratic administration. The beginning signals *I can toe the line for the elite* and the end signals *I can talk the 'we need to help the middle class' talk*
Hillary, are you listening?
JK,
Yes he starts off with the typical deficit scaremongering story, and also sets out Rogoff anti deficit argument. But he then argues that they are nonsense.
That combined with the long quote he put on his blog the other day from Abba Lerner, means he almost an honorary MMTer, far as I can see.
He is saying we are a stock market crash away from the complete doom. "economists watch prices". Very reassuring. He is still lost.
Tom,
Have you noticed that Krugman now apparently thinks MMT is so right that he tries to "sign up" to it retroactively?
In his recent blog he claimed he didn't worry about Italy's debt in the 1990 because he knew it had its own currency! Blatant rewriting of history as he was really "puzzled" about why Italy has higher yields than Japan as recently as 2011. Then he "discovered" the answer 4 months later in Nov 2011 (of course without crediting MMT). In 2003-2004 he issued warnings on US debt, said rates would "skyrocket", but now apparently he knew all along that for sovereign countries they never skyrocket. Pretty sad how he lacks integrity. But great that he realizes MMT is the answer here.
http://krugman.blogs.nytimes.com/2013/04/29/the-italian-miracle/
http://pragcap.com/a-puzzle-solved
He is saying we are a stock market crash away from the complete doom. "economists watch prices".
What he should have said is that neoclassical economists watch prices (therefore price stability, therefore are monetarists), and Keynesians true to Keynes watch employment and therefore are fiscalists.
@ Ron T
Noticed that and it's following the playbook I predicted some time ago. The mainstream just needs time to "invent" MMT and "prove" that they really knew it all along.
That's why the record is important.
Nailed him Ron... rsp,
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