Stxx (guest) meinte am 1. Jul, 22:57:
An interesting question these days. For every $5 that the consumer does not spend and the banks won't lend the government will engage in its make-whole promise of a super-levered economy and spend $1 instead with multiplier effects...I am not so sure how this multiplier will play out in an environment of low consumer confidence, the threat of tax hikes and the fear of job loss.
Crowding out will be a BIG theme in the coming years
wcw (guest) antwortete am 2. Jul, 01:47:
that paper == hooey
Someone passed it around work (Cogan sits on a board nearabouts). I skimmed it, and the most charitable thing I thought was that, using the same methods and more-reasonable assumptions, you come up with a completely different result. You may also try this more-detailed smackdown written by an actual practitioner.
What is their explanation for assuming a different fiscal policy? ..the monetary policy rule that Romer and Bernstein believe that the Federal Reserve is following makes fiscal policy.. so powerful... [they] are going to make a different assumption about monetary policy that makes fiscal policy weakThis is a paper that reminds me of the old joke they told when I was getting my math undergrad. "Prove all odd numbers are prime," challenges the mathematician. "OK," replies the economist, "assume all odd numbers are prime..."
