...and 73% of statistics are made up.
Nick Rowe has a good post on the debt thing. I've never heard the full blown #1, and am not even sure Lerner thought it, but "Abba Lerner" is as good enough a label for it as any (see post). I'm personally in the #4 camp and I think that the Abba Lerner points have a lot to say for the #4 position, even though the extremism of the #1 position seems wrong to me.
That's how I've always read Krugman - as a #4-er that uses some #1 insights.
Which is why I've been puzzled about why Nick Rowe feels like he's so different from Krugman, because I've always thought of Krugman as a #4. Sure they have some different emphases and language, but nothing seemed blatantly contradictory.
Even Don Boudreaux was making a bunch of #4 points along with his #2 points.
I should also add that just like #1 has some good insights, so do #2 and #3. All of these guys were brilliant. Public choice issues associated with political allocation vs. market allocation are thought essential to consider by all economists. Individual rational behavior to offset costs are thought essential to consider by all economists.
Let's be serious people - what economist can you name that doesn't understand the pitfalls of political allocation of resources? What economist can you name that doesn't understand that the human animal takes rational actions? I can't think of a single one.
This talk about "Krugman not knowing the risks of government" or "neoclassicals being absurd because they talk about rational behavior" gets really, really, really old.
I think a whole lot of these differences come from how we talk about these issues, and a lot of the rest comes from sketchy empirical evidence.
Turning a probability vector into a state
9 hours ago