Tuesday, August 20, 2013

Two quick links back here

- First, from Brad DeLong - he reproduces an old post of mine on Sumner and how "haters gonna hate" (just love picturing Brad DeLong say that)

- Second, David Henderson finds my point on Keynes and uniform movement of industries convincing and links back graciously. So graciously, in fact, that I hate to pick a nit and make a plea for putting more meat on this, but I feel I must. He says that Galbraith probably shouldn't have roped Keynes in, but that it just should have been edited to include the Keynesians that are guilty of this. The thing is, I still have no idea why he thinks any Keynesians think this. It's really a silly idea in the first place and I think deleting the whole thing was the right move. I've confessed that I don't know Robinson or Harrod (and now he adds Hansen and Hicks) as well as Keynes, so the fact that David is still keeping them on the list makes me more interested in crowdsourcing this. Why in the world would you accuse them of this? Anybody know? I'm left proving a negative unless everyone on David's list has a clear alternative claim like Keynes does. But does anyone know of anything to justify David's bearishness on early Keynesians? I anticipate Bob Murphy would share this post of Krugman's, but that hardly makes the cut in my opinion. Clearly everyone that thinks the problem is at all related to aggregate demand or monetary disequilibrium will think both the crisis and the recovery will be broad based - but that's quite clearly not the view that Galbraith is criticizing (we can talk more about that if he or anyone else actually thinks there's a case there). Anything else? What do you think of David's edits vs. mine (and more importantly, why)? If any of the early Keynesians that David lists actually thought this I would have to steeply discount my opinion of them.

5 comments:

  1. I have no idea about the historical figures, but certainly in modern times, worrying about the distribution of demand between industries is not a Keynesian theme. In fact, when Larry Summers had the temerity to wonder about stimulating particular projects with low interest rates, he was sent to the Time Out corner and had to put on the "Austrian" cap.

    Krugman routinely points to data trying to show this isn't a sectoral thing, but an across-the-board drop in demand.

    Now I grant you that you could reconcile all of the above with your point, but do you at least see why non-Keynesians might plausibly think Keynesians believe what even JKG thought they believed?

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    1. Keynesian theory is not grounded in differential behavior of sectors in the way that ABCT is, that's true.

      This seems completely different to me from saying that Keynesians think all sectors move together uniformly.

      Scratch "this seems... to me" - this IS completely different.

      re: "Now I grant you that you could reconcile all of the above with your point, but do you at least see why non-Keynesians might plausibly think Keynesians believe what even JKG thought they believed?"

      Not unless you confuse the two things, but I'm not sure why you would confuse the two things.

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    2. Ya I knew you'd say that about Krugman - I don't think I have the best link above - there's another you've blogged about before, but I can't find it.

      Again, though - would you think that Austrian monetary disequilibrium theorists are also guilty of what Galbraith says here just because they think recessions are broad based?

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    3. Daniel wrote:

      Again, though - would you think that Austrian monetary disequilibrium theorists are also guilty of what Galbraith says here just because they think recessions are broad based?

      I tend to avoid those battles, because I am against civil wars. But I bet the anti-FRB do in fact get into such territory.

      Delete
  2. Congratulations on being hoisted from the archives of Brad DeLong's blog, Daniel Kuehn!

    Perhaps this is a minor point that might cause some confusion, but it seems to me that one ought to be careful in distinguishing the aggregate supply function from the aggregate supply curve/employment function. Nevertheless, I do approve of you quoting from Chapter 20 of The General Theory, Daniel Kuehn.

    The aggregate supply function is a straight line, and consists of the nominal wage (w) and the number of labourers hired (N), along with a constant of integration. But the employment function/aggregate supply curve, although it does go up, it isn't a straight line.

    The aggregate supply curve/employment function allows for the locus of intersections that form multiple equilibria in the output market.

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