- I'm not sure anybody thought supply stopped mattering.
- I'm not sure how the low employment to population is not "the real story" in the economy. I mean you could have other stories but that seems like a reallyreallyreally huge one!
- I'm not sure how it's "plausible" that we're at full employment. I'm perfectly happy to acknowledge changes in the NAIRU, but remember that the NAIRU is kind of funny at low inflation rates.
- Ryan is offers us research from Econ Journal Watch on the impact of unemployment insurance. My understanding from Jess Rothstein was that the supply side effects were on the order of 0.1-0.5 percent, and from the CBO (and they use the literature), that the mutliplier estimate (i.e. - the total effect) was 1.6. Ryan seems to trust that Econ Journal Watch study, though.
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Ultimately we are going to be drifting into the long-run, that much is true. In fact I hope very much that I will live out the rest of my life without paying all that much mind to short-run macro again (focusing instead on labor economics, policy evaluation, growth theory, and a little history of economic thought when I get the time). But this post still has a little too much crazy in it for me.
Posts
-The other measures of unemployment are 90% picking up on demographics and crap like that, or at least that's what I've seen when people peak beneath the surface. The sudden collapse is a statistical artifact. I'm repeating responses I've heard to sane sounding people yelling at Obama-bashers. Are we below where we should be? I believe that, but I still attribute that to the fact that the economy is doing "meh" right now. If we look at where we were and where we are now, the long-run equilibrium is 25% of the way back up, not 100% or 75% of the way up.
ReplyDelete-I gave the breakdown for why it is plausible. Do you accept 5% as the NAIRU (assuming 3% inflation or whatever you want)? Is 6% non-credible (I have no idea why it isn't)? I chose the Econ Journal Watch article because I perceived it to be centrist - it's a criticism of Barro, after all. Is it non-credible to say that the "everything else" is 1%? None of these are crazy positions.
-Stop pretending to agree with me and citing what amounts to aggregate demand!
-Demonstrating your sheer ignorance about everything economic, it is PokemOn, not PokemAn. It comes from "Pocket Monsters."