- Nick Rowe does a good job explaining S=I, and talking about the difference between accounting identities and behavioral theories in economics. I will have to keep this post in mind this fall. My TA assignment is to work with a 300 student introductory macroeconomics class. As a new PhD student I'm sure I'll get a pile of grading, but I'm pretty sure I'm going to be holding review sessions as well. My experience in the blogosphere these last couple years has taught me that keeping identities and theories (and their respective purposes) straight is a big struggle for how people think about macro.
- Livio di Matteo is also looking towards fall classes, specifically teaching a history of economic thought class (I'll be taking such a class as well). Matteo discusses three excellent reasons to take history of economic thought seriously:
"1.It is fun.
2.As part of the liberal education of an economist.
3.A better understanding of the discipline as something that is subject to change rather than set in a final form."
Number 1 I definitely agree with, but I have to keep reminding myself that it doesn't offer as many career options. Number 2 I think is deeply underappreciated. And I like number 3 because it pushes back on this notion that history of thought isn't relevant to the practice of economic science. To a certain extent it's not relevant insofar as all the personalities themselves don't matter all that much. But it does help you understand the context of what you're doing, and just as Newton helped us get to the moon despite being eclipsed, Adam Smith and John Maynard Keynes still offer excellent theory despite being eclipsed as well.
- Karl Smith offers yet another excellent critique of Casey Mulligan. He writes:
"In a summing up post Casey states
'There is still no evidence to confirm the fundamental Keynesian propositionThat was the fundamental proposition? I don’t think we had to go through all of this to see that this isn’t true and I am not sure who really thinks it is...
that supply doesn’t matter.'
In contrast I thought the question we were trying to answer is: how is it possible that output can collapse without an apparent decrease in supply?
How is it possible that the US can have the same number of machines, the same number of workers and the same technological know-how yet nonetheless is producing less of the things that people want then it was a year before?
This is the core question."
As Greg Mankiw once said - I'm not a supply-side economist or a demand-side economist. I'm a supply and demand economist.
- Brad DeLong has an interesting post on Alfred and Mary Marshall.
- Robert Skidelsky has a surprisingly good post on Keynes and Hayek. I think he does a decent job summarizing the Hayek position too - but you all can let me know if you don't think so.