Category Fiscal policy
The federal deficit is shrinking
The last few releases of the Fiscal Monitor show that the federal deficit is finally starting to shrink appreciably.
The politics of NGDPLP targeting, redux
Back in November 2011, there was a part of the world that I didn't understand. The politics of monetary policy didn't make sense to me. Now the world is starting to make more sense. It's not that my understanding has changed. It's the world that has begun to change. Specifically, John Quiggin has come out […]
Robert Waldmann (and others) on Dean Baker (and hence Paul Krugman) and the burden of the debt on future generations
Robert Waldmann here. Bob Murphy here. Richard Williamson here. I've done my bit, and have failed. Robert Waldmann may succeed. If Robert Waldmann fails too, that would be very bad for the credibility of economics blogging.
Asking the right question about fiscal policy
If you can't get a good answer to a question, it might be because you are asking the wrong question. Good answers need good questions. Before 1975 (roughly), we used to ask questions like: "What is the effect of increasing the money supply today, when unemployment is bigger than normal?" After 1975, economists learned to […]
A very simple derivation of the balanced budget multiplier in a very monetarist model
This is mainly a brain-teaser. But I hope you find it useful, as well as fun. 1. Assume initially there is no government. So G=T=0, and Y=C+I. (You can add in net exports too if you want, or delete I if you want to make the model simpler still.) 2. Assume MV=P(C+I), where V is […]
Where (I think) Mike Woodford’s model of the multiplier is wrong
Paul Krugman asks a fair question. If anyone disagrees with what Mike Woodford says about the New Keynesian government expenditure multiplier, can they point to where exactly they disagree with Mike Woodford's model (pdf). I am going to do just that. I'm not 100% sure I'm right (we never should be). But I think Mike […]
Consumption smoothing and the Keynesian multiplier
This is the simple short version, but it covers quite a lot of ground. Nothing much new here. Maybe the bit towards the end is newish.
Bob Murphy plays with the debt burden
I don't normally do blog posts with just a link to someone else's blog post. We aren't that sort of blog. But I'm going to make an exception in this case. Bob Murphy's latest post on the burden of the debt is very clear, very comprehensive on both sides of the debate, and very funny. […]
Steve Landsburg goes “meta” on me
Steve Landsburg has what I think is the best response so far to my "Debt is too a burden on our children unless you believe in Ricardian Equivalence" post. [Update: I strongly recommend Steve's latest post, which puts everything together.] Steve says "I want to explain what [Nick] means, and why it’s wrong." But he […]
Matt Yglesias, spilt milk, and the debt burden
I visit Matt Yglesias' house (HT JeffreyY). I drink one litre of milk from his fridge. I write Matt an IOU for one litre of milk. 1. If Matt subsequently tears up that IOU, then I am richer and he is poorer. Taking the two of us together, in aggregate we are neither richer nor […]
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