Commenter J directed me to a passage by R&R from their now famous letter to Paul Krugman: We don’t see your attraction to fiscal largesse as a substitute. Periphery Europe cannot afford it and for Germany, which can afford it, fiscal expansion would be procyclical.  Any overheating in Germany would exert pressure on the ECB […]

Here’s Ryan Avent: There is little reason to expect the economy to accelerate in the near term. Barack Obama desperately wants to scrap the sequester, but unless congressmen heard a groundswell of protest in their districts during this week’s recess, they are unlikely to return to Washington motivated to fix it. The Federal Reserve had […]

I can’t say I am surprised by what people are writing.  But it’s still disappointing.  Let’s review the past 6 months: 1.  The Fed sees fiscal austerity on the horizon in late 2012, and tries to offset it with several monetary initiatives.  They even say they are doing the stimulus with the intention of shielding […]

David Glasner has a typically excellent piece on Ralph Hawtrey and the “Treasury View.”  It seems the Keynesians have been unfairly maligning Hawtrey for all these years.   (Why am I not surprised, they don’t just adopt Keynes’s ideas, but also his smear tactics.) Here’s Hawtrey: What has been shown is that expenditure on public […]

Matt Yglesias has an excellent post on how to think about the current overheating in the US economy. Here are a few excerpts: So NGDP, even though it’s a bit of an unfamiliar indicator, is also a very simple one. Counting up the total amount of dollars spent across the economy isn’t a totally trivial […]