Tyler Cowen asks for one sentence containing the most insights of macroeconomics. Sumner weighs in. People are very cycle-focused now (for obvious reasons), but we shouldn't forget growth theory. I would offer: "Generally speaking, the short run is demand constrained and the long run is supply constrained". It seems like a sentence that grabs a lot from the 18th century to today, and it covers growth and the cycle. And of course I think it's essentially true, which is nice too.
This of course butts up againts Tyler's point that historically most downturns are real - I'm happy to add a caveat about market economies or financial economies or whatever seems right to add, but I don't think that's really necessary.
Friday, January 4, 2013
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I am struck by the obtuseness of many of the commenters on Cowen's site commenting on the Feynman sentence. It's like all the ID stuff at Murphy's. Is there some sort of thorough-going scientific illiteracy in the libertarianosphere?
ReplyDeleteaction stemmed from an individuals perception of causal as well as acausal connections is what allows for reaffirming supply demand constituting movement
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pontificating on what one knows to be true may net less macro pontification