I really do not like the "too many workers" framing: I vastly prefer either:
- Too little public investment
- Too little government purchases
- Too little government debt
- Too little risk-bearing capacity
- Too little in the way of safe assets for savers to hold
Grasping Reality
Must-Read:I really do not like the "too many workers" framing
Brad DeLong | Professor of Economics, UCAL Berkeley
See also
Brad expands on this at WCEG
WCEG — The Equitablog
Whose Are the Ruling Macroeconomic Ideas?Brad DeLong
See also
It is now six years since Olivier Blanchard called for "outlining the contours of a new macroeconomic policy framework". Yet what is that framework? Where is it? Who outlines it? And what processes will give it political traction?It is now six years since Olivier Blanchard called for "outlining the contours of a new macroeconomic policy framework"
Brad expands on this at WCEG
WCEG — The Equitablog
Whose Are the Ruling Macroeconomic Ideas?Brad DeLong
6 comments:
Points 3 and 5 are 100% MMT.
Has Brad ever followed up on this bet? -Coffee with Stephanie Kelton
As of January 1, 2016, enough time will have passed for us to be able to judge whether the Federal Reserve's policy shift to the Evans rule plus an open-ended $1 trillion a year of balance sheet has been a success or not.
Stephanie Kelton is almost certain it will not be a success. I think it might well work. Mike Woodford is almost certain that it will work. It seems to me that there is an opportunity here for me to lock in a profit of some sort here…
The first stage of this is crafting a bet that Stephanie Kelton would accept for what states of the economy on January 1, 2016 would qualify as success for the Fed, and what states of the economy would qualify as failure. She does expect a better economy in three years--She expects private sector deleveraging to continue at its slow pace And as a result the forces making for balance sheet recession to ebb. Success would, for her, have to count as stronger than expected improvement in the economy given this positive underlying trend.
Also, Brad appears to have given a 3 hour seminar at UMKC
Too many workers, too many cooks, too many economists.
Points 3 and 5 are 100% MMT.
I would say that they are all similar to MMT, although probably not stated in the same way as MMT economists would
Public investment = increase flow
Government purchases = government spending = increase flow
• Add targeted transfers = increase flow
Government debt = increase deficit = accommodate propensity to save
Too little risk-bearing capacity = need to accommodate propensity to save
Too little in the way of safe assets for savers to hold. = accommodate saving propensity with $NFA
• Add targeted tax cuts like suspension of FICA = accommodate saving propensity
He probably didn't mention targeted transfers and tax cuts because he doesn't think they are feasible politically.
Seems like Brad is getting closer?
Brad’s problem is that he doesn’t believe the economy is there to serve the needs of the people.
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