Nick Rowe looks at the same data and makes a point not many other people have been making: the concern about "quality of labor" has gotten a lot lower since the beginning of the downturn. That militates against Arnold Kling's "recalculation story". I wonder if he'll pick this up.
How does this relate to ABCT? Well, Yglesias thinks of recalculation and ABCT as one and the same. I've said in the past that that's a little strong but there are clearly common threads. And let's be honest - "recalculation story" just means "contracting for specific assets". It's a fairly non-controversial point that does have a lot of common ground with the Austrians too. There's nothing wrong with the way Kling approaches the issue - it's simply a question of how important of a factor it is in the current recession. Do we have near 10% unemployment because of a matching problem or because of something else? Nick Rowe suggests it's something else.
So another question now - why the sudden interest in the NFIB survey? I've been pointing to this data for months and Yglesias and Krugman have pointed to it in the past too. I guess Rampell has a lot of influence on what gets blogged about.
The EMH versus the CAPE
3 hours ago