Both of the quotes-- deficits crowd out private investment and deficits
cause high interest rates (more specifically there that lowering deficits
cause lower interest rates) are pure Summers, but you are right that
"pre-Keynesian" is the correct general label. Bob Eisner and Bill Vickrey
spent
Mat Forstater asked:
why would
Brad contribute to perpetuating such theoretically, empirically,
historically, unsupportable views, when he surely knows better?
I don't know about Brad, but the general problem of the continuing dominance
of pre-Keynesian ideas in the thinking of economists
Later, he writes that "Lowered interest rates [in the 1990s] driven
in part by the shrinking of annual budget deficits..."
According to the usual sources on interest rates, the 1990s real
interest rates were high, not low.
I wrote "lower*ed*" for a reason...
Brad DeLong
Both of the quotes-- deficits crowd out private investment and deficits
cause high interest rates (more specifically there that lowering deficits
cause lower interest rates) are pure Summers, but you are right that
"pre-Keynesian" is the correct general label.
Nah. In the context of the 1980s
sorry.
Later, he writes that "Lowered interest rates [in the 1990s] driven in
part by the shrinking of annual budget deficits..."
According to the usual sources on interest rates, the 1990s real interest
rates were high, not low.
I wrote "lower*ed*" for a reason...
Brad DeLong
Jim Devine
Mat writes:
Both of the quotes-- deficits crowd out private investment and deficits
cause high interest rates (more specifically there that lowering deficits
cause lower interest rates) are pure Summers, but you are right that
"pre-Keynesian" is the correct general label.
Brad ripostes:
Nah.
(BTW, before I start my diatribe, notice that higher interest rates
(Brad's topic) are not the same thing as "crowding out" of private
investment (Mat's topic). This is especially true because government
deficits encourage private spending via the accelerator effect.)
Very true...
In the
I wrote:
In the process, the second problem with Brad's riposte was revealed,
i.e., the assumption that the Fed has the _power_ to target real GDP.
Brad says:
They think they do (albeit imperfectly, with substantial errors)
well, I think I'm the king of England (albeit imperfectly, with
