Here’s what economists knew before the General Theory:

1.  Monetary policy and velocity determine NGDP growth.

2.  Velocity is positively related to interest rates (and hence investment booms and deficit spending may raise velocity.)

3.  Wages and prices are sticky in the short run.

4.  Because of point 3 a monetary shock may produce a liquidity effect for short term rates.

5.  Because of point 3, money and velocity shocks can destabilize output in the short run.

Den ganzen Beitrag lesen…

A few months back I argued that “if policy A would have prevented event B, then not doing policy A caused event B.”  This is what happens when you try to talk about concepts like “causation” without having studied philosophy.  I still haven’t studied philosophy, but at least I have thought about the issue a bit more.

Den ganzen Beitrag lesen…

I woke up today dreading having to write part 2 of my liberalism and utilitarianism post, and then decided to just blow it off.  I suppose a blog should be more like jazz improv, rather than the laborious construction of a symphony in parts.  So tonight I’ll do shorter pieces on the following 4 questions:

1.  Are macroeconomists just a bunch of astrologers?

2.  Are Democrats just a bunch of socialists?

3.  Do soaps promote liberal values?

4.  How many Tyler Cowens are there?

Den ganzen Beitrag lesen…

Originally I had planned on a post arguing that the best way to understand liberalism in all its various permutations is by equating it with utilitarianism.  But I thought it might be better to break it into two posts, to keep the length more manageable.  I’ll do the liberalism part next Sunday.  Keep in mind that today’s post is intended to be a defense of utilitarianism from the liberal perspective; it is not aimed at objections that non-liberals might have.  Thus I don’t address dogmatic libertarian arguments against progressive taxation.

Den ganzen Beitrag lesen…

I may do a longer post on utilitarianism on Sunday, but since a recent post by Bryan Caplan perked my interest, I thought I would get a brief head start today.  The context was a debate between Bryan Caplan and Robin Hanson on liberty vs. efficiency.  Although Robin was defending efficiency and not utilitarianism, Bryan’s argument in his blog post is exactly the sort of argument that many philosophers make against utilitarianism, so I will respond on that basis.  I should say that just as with my defense of the efficient markets hypothesis, I am not so much pro-utilitarian, as I am unimpressed with arguments against utilitarianism.  Indeed, on Sunday I will express some of my own reservations with utilitarianism.

Den ganzen Beitrag lesen…