tag:blogger.com,1999:blog-2546602206734889307.post8426223971845372811..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: Economic credibilityMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger37125tag:blogger.com,1999:blog-2546602206734889307.post-43492988474066831662015-08-30T11:56:58.834+00:002015-08-30T11:56:58.834+00:00Unfortunately, you need both time and repeated exp...Unfortunately, you need both time and repeated experiments to learn this way. By which time many people may have been thrown out of work. That is why it is better to use the evidence we already have. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-19368769469910496402015-08-30T11:54:32.094+00:002015-08-30T11:54:32.094+00:00"refuse to take part in the debate" ?? B..."refuse to take part in the debate" ?? Before the election, I wrote a great deal about the key issue of whether the last Labour government was profligate. To my knowledge Labour did not use this material once. I wrote one paragraph on the SNP's line on austerity, and got quoted by the SNP. I think the failure does not lie with academics here.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36253317295238081022015-08-30T11:50:54.604+00:002015-08-30T11:50:54.604+00:00I agree, and I think that is consistent with what ...I agree, and I think that is consistent with what I wrote here:<br /><br />http://mainlymacro.blogspot.co.uk/2015/08/peoples-qe-and-corbyns-qe.html<br /><br />But policy innovations need to be well thought out if they are to avoid being labelled as 'not credible', and I do not think Corbyn's QE was.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-47964889884678306632015-08-30T11:46:57.467+00:002015-08-30T11:46:57.467+00:00New Keynesian models suggest fiscal stimulus at th...New Keynesian models suggest fiscal stimulus at the ZLB, so I'm not sure what your point is. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-10014099525574539492015-08-30T11:43:45.165+00:002015-08-30T11:43:45.165+00:00Corbyn's QE could be translated into something...Corbyn's QE could be translated into something sensible, as I outline here:<br /><br />http://mainlymacro.blogspot.co.uk/2015/08/peoples-qe-and-corbyns-qe.html<br /><br />Maybe best to sort this out before going public?Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-31895039343819540512015-08-30T11:40:45.052+00:002015-08-30T11:40:45.052+00:00Any framework that attaches any weight to monthly ...Any framework that attaches any weight to monthly budget numbers is hopelessly wrong! Deficits are pretty random on a monthly basis, and should in any case be a shock absorber. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-46443922484061995702015-08-30T11:37:52.504+00:002015-08-30T11:37:52.504+00:00Original comment: I have written many posts on the...Original comment: I have written many posts on the empirical evidence on fiscal policy. There you will find that the overwhelming majority of studies reject expansionary austerity. You should do some reading before making comments again.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-49658411961391676432015-08-30T11:34:08.065+00:002015-08-30T11:34:08.065+00:00"The case for CBI was always deductive, never..."The case for CBI was always deductive, never empirical." No - the simple cross country correlations popularised by Alesina were at least as influential. I agree that the textbook rationale for central bank independence is overblown. Its much simpler - politicians cannot be trusted not to distort what are technical decisions for political ends. I have seen no evidence to suggest that has changed, and a lot of evidence that it has not.Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-81694233213343820162015-08-30T11:25:10.044+00:002015-08-30T11:25:10.044+00:00I think I understand a bit about these processes. ...I think I understand a bit about these processes. One thing I understand is that it is difficult to get something thought of as credible if it goes against the interests of the financial sector or central banks. PQE clearly has that problem. When that happens, you have to have the rationale for your change nailed down, and Corbyn's QE does not. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-9127029970139400392015-08-26T10:50:57.058+00:002015-08-26T10:50:57.058+00:00ABC is not original. It used to sound for anything...ABC is not original. It used to sound for anything but Clinton. Not surprisingly, given its considerable US influence, this has been adopted as a New Labour tactic.<br /><br />Myself, I say 'anything but Cooper'.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-73245800428117416522015-08-26T10:15:50.870+00:002015-08-26T10:15:50.870+00:00An empirical model, yes. It will be published soon...An empirical model, yes. It will be published soon and I'll be sure to let you know so you can retract your smarmy and smug comment at the time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-44321133265117639912015-08-25T19:06:12.384+00:002015-08-25T19:06:12.384+00:00"Krugman has no credibility when it comes to ..."Krugman has no credibility when it comes to fiscal macro. You might want to find a better source next time :)"<br /><br />And your credibility is? Your source is? You have correctly predicted the results of austerity and of QE (no inflation etc.) and Krugman has not?<br /><br />Do you have a credible data source refuting Krugman's criticisms of A-A? Or a model that does the same?<br /><br />Strewth.DavidShttps://www.blogger.com/profile/11679346381085854499noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-25237538901148982482015-08-25T07:24:01.923+00:002015-08-25T07:24:01.923+00:00Krugman has no credibility when it comes to fiscal...Krugman has no credibility when it comes to fiscal macro. You might want to find a better source next time :)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-15539466845624814512015-08-25T03:35:51.505+00:002015-08-25T03:35:51.505+00:00Well I always thought Osborne's austerity was ...Well I always thought Osborne's austerity was entirely about getting the business cycle in sync with the electoral cycle even if that intensified the business cycle (which it certainly did). And you have to say he succeeded wonderfully.<br /><br />The key insight here is that it is not the level of GDP or employment that matters electorally but short-term changes in both. As Hobbes said "felicitie consisteth in prospering, not in having prospered". All that economic output that is now lost forever simply does not change any votes. derrida deriderhttps://www.blogger.com/profile/01188777386180390172noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-42642338611838814412015-08-25T00:04:29.163+00:002015-08-25T00:04:29.163+00:00"If you want a non-macro example, consider th...<i>"If you want a non-macro example, consider the minimum wage. Setting the right level for this is a delicate balance, requiring all the empirical knowledge that labour economists have gleaned. "</i><br /><br />Or alternatively, you could just approach the problem iteratively, and slowly raise the minimum wage until the negative effects (inflation, unemployment) begin to outweigh the positive ones (reduced inequality, lower transfer payments) while also considering GDP growth, and debt ratios. Then you stop. At the end of the day the optimum position you seek is based on your political opinion not an economic one, so in that respect Osborne was right to over-rule the LPC. The Labour governments of Blair and Brown should have had the courage to do the same and raise the minimum wage faster than they did.<br /><br />Fundamentally I disagree with your assertion that setting the <i>right</i> level (whatever that is) for the minimum wage is a <i>"delicate balance"</i> that requires detailed <i>"empirical knowledge that labour economists have gleaned. "</i> It isn't and it doesn't. The economy is resilient enough to adjust to small deviations from the optimum without crashing. It is the large deviations that you need to worry about. <br />Cantab83https://www.blogger.com/profile/12485401571391377815noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-44771847904566492372015-08-24T23:27:59.739+00:002015-08-24T23:27:59.739+00:00"Unfortunately, I think ABC are right that so...<i>"Unfortunately, I think ABC are right that something called economic credibility matters a great deal when it comes to winning elections. Also unfortunately, I think they do not realise that economic credibility is something that gets defined in a complex social and political process, and can (and currently does) have very little to do with the economics taught in universities. "</i><br /><br />Perhaps that is because most of the academics that teach in those universities refuse to take part in the debate, or to actively engage in economic policymaking for the Labour Party. Where are the left-leaning economic think tanks in the UK that can provide a counterweight to the IEA, Adam Smith Institute or Centre for Policy Studies? The Fabian Society and IPPR concentrate too much on social policy issues rather than economic ones.<br /><br />Of course heterodox schools like the Post-Keynesians do engage in policy proposals and objectives like reducing inequality and returning to full employment, but they get sidelined because they are not mainstream. In part this is the fault of the Labour Party for not engaging with them. If the Party did then the heterodox would inevitably become more mainstream. So there is fault on both sides.<br /><br />I note that Syriza has appointed two economics professors in succession to the post of finance minister. That would never happen in the UK.<br />Cantab83https://www.blogger.com/profile/12485401571391377815noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-7842694589022878552015-08-24T14:03:41.397+00:002015-08-24T14:03:41.397+00:00So what will be the negative economic consequences...So what will be the negative economic consequences of raising the minimum wage?StuartPhttps://www.blogger.com/profile/13748038209546648459noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-3694947447720350642015-08-24T13:55:33.520+00:002015-08-24T13:55:33.520+00:00To sum up "economic credibility" does no...To sum up "economic credibility" does not imply competence, and vice-versa.Sasha Clarksonhttps://www.blogger.com/profile/09817089491670591343noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-30691361194346091982015-08-24T10:10:21.802+00:002015-08-24T10:10:21.802+00:00Yes. The mainstream media bubble is wholly right a...Yes. The mainstream media bubble is wholly right aligned; so the first action necessary to begin to shift the argument is to get people to move away from it. Completely. Only then will any sort of alternative have a chance of winning any argument with the mass of voters.AllanWhttps://www.blogger.com/profile/05056883330644304960noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-80924301005208089762015-08-24T10:04:47.708+00:002015-08-24T10:04:47.708+00:00What matters a great deal when it comes to winning...What matters a great deal when it comes to winning elections is not being in Government when the most enormous bubble in economic history goes 'pop'.<br />US Republican Party and UK Labour Party both found themselves out of office for two terms. <br />Third time up will be interesting and the US has a go first.StuartPhttps://www.blogger.com/profile/13748038209546648459noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-64838729008480335152015-08-24T09:52:49.826+00:002015-08-24T09:52:49.826+00:00I don't see why a NIB would mean that the Bank...I don't see why a NIB would mean that the Bank of England comes under any more pressure than it faces now. Treasury and Bank often meet now and swap staff, but the Bank is independent by virtue of the apppoitments and tenure process, if that is robust then decisions of PQE to the NIB are no more threat than when Treasury and the Chancellor object to Bank policies now. The NIB would identify public investment with good returns, that is perhaps the more iffy bit, and the Bank would decide when, and if, it provides it QE funds to the NIB, otherwise the NIB just borrows conventionally and lives within means dictated by Treasury. The important thing, as with OBR, NICE etc and all the other technocratic ideas you support for good reason, is that the Bank and NIB is not at the behest of politicians, that is more constitution than economicsAnonymoushttps://www.blogger.com/profile/08802148408408919222noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-15864763631212578052015-08-24T09:45:26.707+00:002015-08-24T09:45:26.707+00:00"If that seems reasonable to you, think about..."If that seems reasonable to you, think about the following. In 2009, most of the world was following mainstream economics in undertaking a fiscal stimulus to combat the impact of the financial crisis."<br /><br />Very convenient interpretation of events. You should become a preacher.<br /><br />Well, most of the world was following "mainstream" macro-theory up until 2009. And sticky price rational expectations adjusted optimisation models. And wasn't that a great help.<br /><br />Sure, post 2009 we saw the return of the General Theory. That seems to be mainstream when it suits the profession - usually after a crisis when it should have been avoided in the first place.<br /><br />'Unconventional monetary policies' were called that for good reasons. Conventional or mainstream economics did not bring anything to the table to help with the design of these. It was historical experience in Japan and an historically literate Fed Governor familiar with the inter-war experience that did. <br /><br />Friedman did suggest such uncoventional policies for Japan back in the 2000s. But Friedman, although a Chicago economist, is not in the Lucas-Sargent mould in his approach to analysis. A Monetary History being a prime example.<br /><br />We really need someone to do a proper-historical analysis here. If we allow mainstream economists to start interpreting history like this, we are not going to properly learn from this experience, exposing us to more problems in the future.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79023485441564285762015-08-24T08:29:44.709+00:002015-08-24T08:29:44.709+00:00The political right own all the media, that's ...The political right own all the media, that's where they get their appearance of credibility from. There's no proper political opposition established as yet as the right own most of politics too.Big Billhttps://www.blogger.com/profile/18373906955091066795noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-56212442568419183132015-08-24T02:26:21.661+00:002015-08-24T02:26:21.661+00:00Wait, it's economically credible to reserve th...Wait, it's economically credible to reserve the right to nationalize industries with no compensation no less? <br />I guess it's pretty credible in Venezuela.Krzyshttps://www.blogger.com/profile/15794655390770135247noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-68502908143593657112015-08-23T22:38:49.747+00:002015-08-23T22:38:49.747+00:00http://www.interfluidity.com/v2/5561.html
There is...http://www.interfluidity.com/v2/5561.html<br />There is a good post here on the obsession with price stability.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.com