Category Archives: Economic Sciences

The Krugman Multiplier is too big

Paul Krugman is a very active blogger. Almost every time he writes a post on his New York Times blog, there are several comments made around the economic blogosphere. And sometimes Krugman will respond to a few of the comments made, and then it sets off further comments, and so on. It is a Krugman Blog Multiplier. I posit that it needs no formal empirical evidence to establish that it is way above 1. Way above. In this New Year’s post I’ll show a recent example, and argue why this multiplier is too high, and why one should not always “exploit” large multipliers. Probably one of the issues on which … Continue reading

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Don’t Fence Me In: Sargent rejects slogans

This is just a heads up for a recent interview with the new Nobel Laureate Thomas Sargent. In the New York Times article, “The Slogans Stop Here“, he explains the futility of trying to label economists as belonging to various theoretical or political “camps”. It is a great read, and I can’t help emphasizing the following: “If you go to seminars with guys who are actually doing the work and are trying to figure things out, it’s not ideological,” he said. “Half the people in the room may be Democrats and half may be Republicans. It just doesn’t matter.” These are simple, but great words. In my part of the … Continue reading

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Sargent and Sims (2011)

Today, the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (yes, this is the long and formal title for the Nobel in economics), was awarded to Thomas J. Sargent and Christopher A. Sims. The following caption summarizes the motivation: “for their empirical research on cause and effect in the macroeconomy” The longer motivation, and survey of the recipients’ academic contributions, can be found here (pdf 600 Kb). As a macroeconomist, I can only support this choice. These are definitely two of the profession’s “grand old men”, and it is difficult to write a modern paper without citing either of them, or both. Their influence in theoretical and … Continue reading

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Krugman on “Republican Science”: Can we please make a trade barrier against that?

This is an endorsement. Paul Krugman’s recent Op-Ed in the New York Times describes in horrifying detail how some parts of America, and potential Republican Presidential candidates are turning their back against science. The piece, Republicans Against Science, is really scary. Read it and weep. The Wall Street Journal editorial by a Stephen Moore that Krugman mentions, can be found here. It is also a horrifying read. It basically says that economics is stupid, and common sense is better. Weep some more. It is scary right now for me, as my country have an election campaign where main issues are economic. And since American tendencies inevitably are imported in Europe … Continue reading

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Economics as a Moral Science. American Economic Review: Papers & Proceedings 2011

The annual Papers & Proceedings issue of the American Economic Review is always a good read. It is literally full of papers from leading scholars on the newest “hot” topics in the profession as well as updates on the status of more enduring topics. The format of the issue is ideal for those who want a fairly quick introduction or refresher on a subject, since each is covered by three to four short papers that made up the corresponding session at the recent winter meetings of the American Economic Association. For those who think that economics is a narrow-minded science, it is recommended to pick up the latest issue to … Continue reading

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