Lars P. Syll — More Oxford flimflam

Lars smacks down New "Keynesianism." What's new about it is that it is not Keynesian.

More Oxford flimflam
Lars P. Syll | Professor, Malmo Universit

Travis Gettys — Maine governor says 47 percent of state’s residents choose not to work (via Raw Story )

Maine governor says 47 percent of state’s residents choose not to work (via Raw Story )

Maine’s tea party-backed governor suggested during a conservative gathering last week that nearly half the state’s residents who could work do not. Gov. Paul LePage said he had two points to make last week when he was told the gathering in Falmouth…

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John Aziz — The “Unemployment Is Voluntary” Myth

Is the reason why unemployment is elevated that millions of Americans are choosing not to work because of cushy government welfare provisions?

After all, welfare payments as a percentage of GDP and unemployment have risen in tandem...

Well, if labour was truly slacking off then we would expect to see a shortage of labour. But instead we see an elevated level of applicants per job openings...

This means that there are not enough job openings in the economy even for the number of current jobseekers, let alone the discouraged workers and disabled individuals who are claiming welfare.

azizonomics — Economics for the jilted generation…
The “Unemployment Is Voluntary” Myth
John Aziz

Lars Syll — New Keynesians, price stickiness and involuntary unemployment (wonkish)

Very clear explanation of J. M. Keynes in The General Theory v. New Keynesianism. It's not really wonky and no math, so if you aren't totally clear on this important issue, take a look. 

In my view, it's a likely factor in shaping the Obama administration's lackluster push for an initial stimulus package to adequately stimulate effective demand to address involuntary unemployment. Christina Romer seems to have gotten it, with her 1.2T proposal whittled from her original estimate of 1.5T.

But Larry Summers, not so much. Summers complained about the politics of it as the reason for his smaller package, but he was paid as chief economic advisor to the president, not as a political strategist. Was he thinking that depressing the real wage would address unemployment "more cost-effectively"? Apologies to Professor Summers if I am imputing analysis and motives that are incorrect, and which he never profess in terms of setting policy, but it looks plausible to me. Otherwise why propose a stim that would be too small, with little chance for getting a second shot?

Lars P. Syll's Blog
New Keynesians, price stickiness and involuntary unemployment (wonkish)
Lars P. Syll | Professor, Malmo University