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Assorted links
1. Transcript of Bob Lucas talk, with eminent questioners and, at one point, Bob Lucas falling down the stairs.
2. Bloggingheads.TV between Mark Thoma and Scott Sumner.
3. What Larry Summers learned at a hedge fund.
4. Lesswrong, a rationality blog, with guest posts by Robin Hanson.
5. Markets in everything: a pro al Qaeda magazine, from North Carolina, in English.
Posted by Tyler Cowen on April 6, 2009 at 08:21 AM in Web/Tech | Permalink
Comments
Mark Thoma is so reasonable and pragmatic in that diavlog, and favors active fiscal policy. Smart guy.
Posted by: Dirk at Apr 6, 2009 8:29:03 AM
The article on Larry Summers is quite amusing. How did Mr. Summers get the 1 day-a-week, $5.2 million dollar job? The article says, "As part of Shaw’s rigorous screening process — the firm accepts perhaps one out of every 500 applicants — Mr. Summers was asked to solve math puzzles. He passed, and the job was his." I can just see Mr. Summers going through the screening process with the other 499 applicants. Oh yeah, that's just the way it happened.
Posted by: Adam at Apr 6, 2009 9:00:33 AM
That should read "Markets in Everything: Thought Leader Integrity Edition"
Posted by: Andrew at Apr 6, 2009 9:35:04 AM
adam, lmao, so true. there's just no way it went down like the nytimes says.
Posted by: working class at Apr 6, 2009 3:41:18 PM
I think we can safely assume the NY Times author included that vignette because it is so transparently fake.
Posted by: rcyran at Apr 6, 2009 5:24:22 PM
From Lucas's talk:
"But, if we do build the bridge by taking tax money away from somebody else, and using that to pay the bridge builder -- the guys who work on the bridge -- then it's just a wash. It has no first-starter effect. There's no reason to expect any stimulation. And, in some sense, there's nothing to apply a multiplier to. (Laughs.) You apply a multiplier to the bridge builders, then you've got to apply the same multiplier with a minus sign to the people you taxed to build the bridge. And then taxing them later isn't going to help, we know that."
That seems just plain wrong, assuming the bridge builders were idle before the fiscal stimulus. What am I missing?
Posted by: Commenterlein at Apr 6, 2009 7:19:03 PM
Commenterlein: you're missing that someone else was made idle by the reduced spending of the taxpayers. The money that would have gone to the baker is siphoned through the government to the builder.
If I understand this right, stimulus is only stimulus if it's with borrowed (or accumulated) money, so that the tax-collection happens at some richer later (or earlier) date, and not during the recession you're trying to smooth out.
Posted by: improbable at Apr 6, 2009 11:49:29 PM
"If I understand this right, stimulus is only stimulus if it's with borrowed (or accumulated) money, so that the tax-collection happens at some richer later (or earlier) date, and not during the recession you're trying to smooth out."
But according to Lucas/Ricardian Equivalence theory, people will smooth out their lifecycle consumption. So if taxes are higher this year, a rational consumer will not cut back consumption by 100% of the tax increase, but will instead reduce saving (or increase borrowing) somewhat and take small portion of the hit in each of the remaining years of his life. Both the baker and builder can stay in business today (although they should expect less demand in the future).
Thus, by Lucas's own theory, a balanced budget increase in spending and taxes today WILL increase output today.
Posted by: a student of economics at Apr 7, 2009 6:35:12 AM
doesn't mean much, but funny none the less - http://ftalphaville.ft.com/blog/2009/04/07/54542/summers-regression/
Posted by: working class at Apr 7, 2009 9:56:20 AM
