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26 апреля, 17:30

(Late) Monday Smackdown: Robert Lucas Pretends... Edition

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**(Late) Monday Smackdown:** This, from eight years ago, still seems to me to be highly, highly unprofessional: **Robert Lucas** (2009): _In defence of the dismal science_ : "Fama tested the predictions of the EMH.... These tests could have come out either way... >...but they came out very favourably. His empirical work was novel and carefully executed.... [The] flood of criticism which has served mainly to confirm the accuracy of the hypothesis.... Exceptions and “anomalies”... for the purposes of macroeconomic analysis and forecasting... are too small to matter. >The main lesson we should take away from the EMH for policymaking purposes is the futility of trying to deal with crises and recessions by finding central bankers and regulators who can identify and puncture bubbles. If these people exist, we will not be able to afford them... As applied to macroeconomic analysis and forecasting, the relevance of the efficient market hypothesis (EMH) rests in what it tells us about the overall level of the stock market—of stock market indexes. In this domain, the EMH claimed that movements in the stock market were driven by one of two things: 1. changing rational expectations of future cash flows. 2. changing rational expectations of interest...

26 апреля, 16:19

Donald Trump's corporate tax cuts can't pass Congress

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**Should-Read: George Callas**: _Donald Trump's corporate tax cuts can't pass Congress_: "Here is a data point for folks... >...A corporate rate cut that is sunset after three years will increase the deficit in the second decade. We know this. Not 10 years. Three years. You could not do a straight-up, unoffset, three-year corporate rate cut in reconciliation. The rules prohibit it. You might be able to do two years. A two-year corporate rate cut—I’ll defer to the economists on the panel—would have virtually no economic effect. It would not alter business decisions. It would not cause anyone to build a factory. It would not stop any inversions or acquisitions of U.S. companies by foreign companies. It would just be dropping cash out of helicopters onto corporate headquarters...

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26 апреля, 16:04

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**Should-Read: Kavya Vaghul**: _The student loan crisis is fueled by a weak labor market_: "Holger M. Mueller and Constantine Yannelis... investigate how massive declines in home prices during the Great Recession... >...led to large drops in employment and corresponding rising student loan defaults over that same period.... Falling home prices during the Great Recession were responsible for up to 32 percent of the growth in student loan defaults. What’s more, low-income borrowers appeared to be most sensitive to the change in home prices, probably because they faced the largest earning plunges, had the smallest savings cushions, and, as a result, may not have been able to continue repaying their loans...

26 апреля, 16:04

Republicans exempt their own insurance from their latest health care proposal - Vox

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**Should-Read: Sarah Kliff**: _Republicans exempt their own insurance from their latest health care proposal_: "The new Republican amendment... would allow states to waive out of Obamacare’s ban on pre-existing conditions... >...Republican legislators liked this... enough to offer it in [the] new amendment. They do not, however, seem to like it enough to have it apply to themselves and their staff. A spokesperson for Rep. Tom MacArthur (R-N.J.) who authored this amendment confirmed this was the case: members of Congress and their staff would get the guarantee of keeping these Obamacare regulations...

25 апреля, 20:15

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**Must-Watch: Trade, Jobs, and Inequality** : "CUNY :: The Graduate Center :: 365 Fifth Avenue :: C200: Proshansky Auditorium :: April 26, 2017: 6:30 PM ... >..._New York Times_ columnist Eduardo Porter (Economic Scene) hosts a panel of experts on the complex interrelationship between trade, jobs, and inequality. Participants: * Paul Krugman, Nobel Prize-winning economist, New York Times columnist, and distinguished professor at the Graduate Center. * David Autor, leading labor economist; professor at MIT, where he directs the School Effectiveness and Inequality Initiative; and editor in chief of the _Journal of Economic Perspectives_. * Brad DeLong, economics professor at U.C. Berkeley; weblogger for the Washington Center for Equitable Growth; and former U.S. deputy assistant secretary of the treasury, in the Clinton administration. * Anne Harrison, professor at the Wharton School, University of Pennsylvania; former director of development policy at the World Bank; and author of Globalization and Poverty...

25 апреля, 19:06

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**Live from the Ghost of Internet Past: Tim Carmody**: _Pour some out for the sites that aren’t here: Suck.com_: "So many people, after this story went live, answered... >...“what about " that I had to make an update. Reading Suck is bizarre now, because on the one hand, its wry, teasing, sweetly cynical voice has shaped so much of what we know of the web, but its style is actually quite different. It’s like reading Don Quixote and realizing that Cervantes’s book somehow contains, in miniature, every novel that came after it, but that it is also somehow older and stranger and more imaginative than all of them. Also, that every tech or media hype or hustle is exactly the same as one that happened twenty-odd years before it. This is why reporters who’ve been covering Silicon Valley forever have such a twisted sense of humor...

25 апреля, 18:59

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**Live from the Orange-Haired Baboon Cage: Dan Drezner**: _Six different ways of looking at a Trump tweet_: "Many people are saying that Trump's tweets do not matter. I say they contain some very interesting insights... >...The Heritage Foundation’s James Jay Carafano has been one of the Trump administration’s most stalwart defenders.... Carafano further argues that the appearances are confusing.... "Pundits err when they give every presidential utterance equal merit. A joint address to Congress ought to carry a lot more weight than a 3 a.m. tweet about the Terminator."... [But] when foreign populations react to some of Trump’s more careless words, I think it’s a thing. More importantly, sometimes a single tweet of Donald Trump’s can tell us a great deal about the man and how he is doing as president. So... let me offer six different ways of looking at a Trump tweet from yesterday: >>Eventually, but at a later date so we can get started early, Mexico will be paying, in some form, for the badly needed border wall. >What can be inferred?... I would argue, contra Carafano, quite a bit! In ascending order of importance: 1) Trump cannot write his way out of a paper bag.... 2)...

25 апреля, 18:47

What Can Be Done to Improve the Episteme of Economics?

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I think this is needed: **INET**: _Education Initiative_: "We are thrilled that you are joining us at the Berkeley Spring 2017 Education Convening, Friday, April 28th 9am-5pm Blum Hall, B100 #5570, Berkeley, CA 94720-5570... >...Sign up here: or email [email protected].. I strongly share INET's view that things have gone horribly wrong, and that it is important to listen, learn, and brainstorm about how to improve economics education. Let me just note six straws in the wind: 1. **The macro-modeling discussion is wrong:** The brilliant Olivier Blanchard : "The current core... RBC (real business cycle) structure [model] with one main distortion, nominal rigidities, seems too much at odds with reality.... Both the Euler equation for consumers and the pricing equation for price-setters seem to imply, in combination with rational expectations, much too forward-lookingness.... The core model must have nominal rigidities, bounded rationality and limited horizons, incomplete markets and the role of debt..." 2. **The macro-finance discussion is wrong:** The efficient market hypothesis (EMH) claimed that movements in stock indexes were driven either by (a) changing rational expectations of future cash flows or by (b) changing rational expectations of interest rates on investment-grade bonds, so that expected returns were either (a) unchanged...

25 апреля, 18:29

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**Must-Read:** Friday 9-5 pm: Blum Center: U.C. Berkeley: INET says: learn, share, and brainstorm about concrete future endeavors in broad-church post-secondary economics education. I strongly share INET's view that things are seriously wrong... Sign up here: or email [email protected].. **INET**: _Education Initiative_: "We are thrilled that you are joining us at the Berkeley Spring 2017 Education Convening, Friday, April 28th 9am-5pm Blum Hall, B100 #5570, Berkeley, CA 94720-5570... >...We are convening students and professors who are interested in broadening economics education.... Our goals are to learn more about prevailing needs, pool and share existing pluralist curriculums, and brainstorm the architecture and direction of concrete future endeavors in post-secondary economics education. The economics discipline is in disrepair: publicly discredited, theoretically narrow, and academically constrained. Economics education reflects these flaws.... INET is gathering people in the academic economics community in convenings across the U.S. to better understand the challenges and resources faced by those working to reinvigorate the economics discipline. >Invitations are extended to: pre- and non-tenure faculty, including adjuncts; undergraduate and graduate students; experienced faculty actively engaged in pluralist education.... The convenings will be group-led, facilitated, full-day workshops.... These convenings are an exploratory process for INET. We have not made any...

25 апреля, 15:11

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**Should Read: Peter Ganong and Pascal Noel**: _Consumer spending during unemployment: Positive and normative implications_: "We study... unemployment insurance... using de-identified data from nearly 200,000 bank accounts... >...Spending on nondurables falls by 6% at the onset of unemployment, is largely stable during UI receipt, and then falls by an additional 13% at benefit exhaustion.... That spending responds to a large and predictable income drop sharpens an existing puzzle of the empirical excess sensitivity of spending to income... hand-to-mouth consumers... inattentive consumers.... Because spending is so much lower after UI exhaustion than during UI receipt, the consumption-smoothing gains from extending UI benefits are at least three times as big as the gains from raising the level of UI benefits.

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25 апреля, 15:07

The importance of unemployment benefits for protecting against income drops | Equitable Growth

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**Should-Read: Nisha Chikhale**: _The importance of unemployment benefits for protecting against income drops_: "Jesse Rothstein... and Robert Valletta... the role that unemployment insurance plays in supporting family incomes... >...and how the unemployment insurance system interacts with other parts of our social safety net.... Unemployment insurance does its job: partially insuring against large income declines after a job loss. But once an unemployed worker is no longer eligible for the program, the rest of the social insurance system does little to support those households. Other new research shows the significant decline in income and spending that happens after unemployment benefits are exhausted...

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25 апреля, 15:03

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**Should-Read:** Once upon a time I thought that Google Search and the links graph of the web would make my website self-organizing. Hasn't happened. I do have to do something about that failure—someday. But here we have the smarter-than-me Dietrich Vollrath trying to get a jump on the problem: **Dietrich Vollrath**: _Topics in Economic Growth_: "I just created some new pages... >...that collect resources and materials related to specific topics regarding growth... an exercise in intellectual housecleaning... a way to organize some materials for possible use in classes in the future. Each topic has links to my own posts on the subject, links to other web articles or resources, and some selected academic citations.... Right now, the topics include: Are we rich? Can you reform your way to higher growth? Does growth depend on competition? Does economic growth mean economic development? Productivity slowdown. Is manufacturing special? Robots and jobs. Deep determinants of development. Does economic growth harm the environment? It’s a decent start...