Friday, October 21, 2011

Brain Droppings October 21, 2011

1. In my understanding NGDP targeting, is the second best thing to some sort of policy that DeLong/Krugman are advocating for, that in Yglesias' words would involve "fiscal and monetary policy rowing in the same direction" -and that NGDP targeting actually has some heat and so may win public and establishment support. To which I say, bring on the technocratic incursion --deficit reduction talk by dummies was a creepy national (and still quasi global?) moment. Beyond that, this naturally opens up world GDP targeting, and also concepts of maximally fair trade targeting between countries. Who's looking at these topics? It could be a good way to mentally break from the merry go round of rent-seeking positioning that seems to me to deform most social epistemology on these topics.

2. Russ Roberts had an interesting reply to Krugman in Krugman's comments and on Roberts' blog. I think of Roberts' econlog GMU type crew as dumber than the DeLong/Krugman cohort, but in some ways more virtuous in public engagement (I'd really rather hear many more Krugman/DeLong/Romer podcasts, but I'm probably a microniche audience). Roberts in my understanding claims that a good faith read of research on spending multipliers indicates that there's no scientific consensus, and that the multiplier may range to negative (technically fractional, which I think intuits better as negative?) to significant -I think I remember the range being .5 - 2, and he says that people that claim otherwise are being ideological. I'm surprised by the lack of invoking bayesian reasoning for a best guess at what policy we should extrapolate from these priors with regards to stimulus by Roberts, which makes his argument here a bit suspect to me and similar to how creationists attack teaching only evolution in public schools. I'm less expert and dumber than all parties in this dispute- my intuition says go all in with the DeLong crew, and split no difference with the polite but dumber seeming Roberts.

3. Non-quantitatively literate law types are getting away with far too much blithe regulation in the judicial sphere. I think the econlog crew was fairly virtuous when they suggested replacing supreme court justices with economists, although the idea shocked me and seemed craven for economists to suggest at the time. A beginning solution is a mandatory and public economic impact analysis by a court economists for all judicial rulings by courts covering certain size jurisdictions, such as Federal appellate courts and State Supreme Courts. I think there is already something like this for a lot of administrative regulation (I doubt EPA or OSHA gets away with proposing new regulations without economic impact analysis).

4. Yglesias defense Maddow. I agree. She is much more virtuous than most other (maybe any) cable news show. Beyond that, she's being criticized by The New Republic? Maddow's news show may not have the intellectual cleanness of an expert blog, but I think she beats The New Republic on just about any topic -both in less ideological deformity and in rigour of topic discussion.

5. That crazy animal thing in Ohio, it reads sort of like an anti-libertarian parable, no? I think about bad regulation or the absence of good regulation sometimes in terms of the production of sadness (it makes it emotionally salient, although really, personally, I aspire to think about it in terms of maximizing persistence odds). I think it's part of the larger concept of good and bad design for how people actually use reality.


  1. Fiscal and monetary policy working in coordination isn't really an alternative to NGDP targeting. It's just that if there is fiscal contraction then monetary authorities have to do more to counteract it. As long as we don't think the fiscal authority can respond in a way to neutralize the monetary authority, the end result in terms of total NGDP is not really different.

    Karl Smith gives an inside-view argument for why we should believe in Keynesian multipliers without good historical evidence.

    Yeah, macroeconomics is less settled than micro.

    What is "maximally fair trade"?

    I don't think Kling as endorsed Caplan's proposal for an economic analogue of the supreme court. He takes an anti-elite stance, whereas Caplan is plainly elitist despite his anarchism. I don't know of Henderson saying anything about the proposal. I've already stated my objection to expecting judges to study law & economics, but actual economists doing it would be another story.

    I don't know anything about Maddow, but TNR is terrible.

  2. Maximally fair trade between countries: global trade patterns that maximize how much richer all countries (and the world become), factoring in negative externalities, etc.

    Hopefully Anonymous