Archive for September 2009


The best lack all conviction, while the worst // Are full of passionate intensity

Part 1:  Why is Svensson silent?

In previous posts I have struggled with trying to understand why other economists don’t speak out for easier money.  If you look at Krugman’s writings on liquidity traps it would seem that he should support a more expansionary monetary policy.  More specifically, he should support an explicit inflation target.  And perhaps he does; but he almost never chooses to talk about it.  Another example is Frederic Mishkin, his four key principles of monetary theory underlie my entire argument.  But in a May 2009 AER article he had nice things to say about recent Fed policy.  Yesterday Marcus sent me a paper by Lars Svensson which provided by far the starkest example of this phenomenon.
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Bill Woolsey’s new blog

Ever since I went to China I seem to have been in a perpetual struggle to keep up.  One of the things I feel most guilty about is that I haven’t had much time to follow Bill Woolsey’s new blog, entitled Monetary Freedom.  By now many of you may have already read it, but those who haven’t should take a look.  From the very beginning Bill has been my most supportive commenter.  And he has similar (though not identical) views on monetary policy errors by the Fed.
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Help, I’m surrounded!

I just got back from a very satisfying trip to GMU, where I met a lot of my favorite economists.  I’ll say more about the trip when I have time, but upon returning I found I was being bombarded on all sides.  I feel like I am in a boat that has more holes in the hull than I have fingers to plug them.  Interested readers might want to check out my ongoing debate on Cato Unbound, where I fend off several reviewers.  You’ll see all the replies in the right margin.
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Why are the Swiss so happy?

Because I head to George Mason University tomorrow, this will be my last post for a while.  You might want to follow the discussion on Cato Unbound, where I will be posting replies to Hamilton, Selgin and Hummel.

Right after my last post extolling the virtues of Swiss-style democracy I read Bryan Caplan’s persuasive attack in The Myth of the Rational Voter.  He argues that voters aren’t just misinformed; rather they hold deeply ingrained biases that lead them to make poor public policy decisions.  Naturally I wondered if this refuted my argument.  I don’t think it does, but it weakens it a bit.
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Help me prepare for GMU

Next week I go to George Mason University  (which is suddenly my favorite economics department) to present two papers.  On Tuesday I will talk about the relationship between cultural values and neoliberal reforms.  I have already discussed part of that paper on this blog, and will try to do the Switzerland chapter in a few days.  On Wednesday I present a paper on the current crisis.  I had grand ambitions to write this paper in China, but it was a struggle to even keep the blog afloat.  So now I am under pressure to get something done quickly.

I think the best solution is to present a slightly modified version of my recent Cato paper.  This paper is to be discussed by three distinguished economists over the next week; first James Hamilton (of, then George Selgin, and finally Jeffrey Hummel.  Then we will have a discussion.  It should be a lot of fun, and if I am not able to fully discuss their comments at Cato Unbound (I don’t know if there are space limits) I might add a few comments here.

But then it occurred to me that I really needed to do more than talk about my view of the crisis, I also needed to discuss why almost all other economists are wrong.  (I know that sounds ridiculously arrogant.  Obviously by “wrong” I simply mean “disagree with me.” )

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