Econ 210a: Spring 2011: U.C. Berkeley: J. Bradford DeLong

Econ 210a: Readings for April 20, 2011: World War II, the Mixed Economy and Actual Existing Socialism (DeLong)

Extra Reading for April 20, 2011:

• Richard Ericson (1991), "The Classical Soviet-Type Economy" http://www7.esc.edu/vvernon/ericson91.pdf

Previously Assigned Readings for April 20, 2011:

• Paul Krugman (2006), "Introduction" to John Maynard Keynes, The General Theory of Employment, Interest and Money. http://tinyurl.com/dl20090112z

• John Maynard Keynes (1926), "The End of Laissez Faire." http://tinyurl.com/dl20090112ad

• Mancur Olson (1996), "The Varieties of Eurosclerosis: The Rise and Decline of Nations Since 1982," in Nicholas Crafts and Gianni Toniolo (eds), Economic Growth in Europe Since 1945, (Cambridge, Cambridge University Press), pp.73-94. http://tinyurl.com/dl20090112x

• Barry Eichengreen (1996), "Institutions and Economic Growth: Europe Since 1945," in Nicholas Crafts and Gianni Toniolo (eds), Economic Growth in Europe Since 1945 (Cambridge University Press), pp. 38-72. On reserve at Graduate Services, 208 Doe Library. http://tinyurl.com/dl20090112x

Econ 210a: Extra Reading for April 20, 2011

Econ 210a: Extra Reading for April 20, 2011: Richard Ericson (1991), "The Classical Soviet-Type Economy" http://www7.esc.edu/vvernon/ericson91.pdf

Econ 210a Memo Questions for April 20 and April 27, 2011

Econ 210a Memo Questions for April 20 and April 27, 2011:

April 20: A couple of weeks ago Martin Wolf asked Lawrence Summers a question:

Wolf: "Wouldn’t a reasonable non-economist conclude... here we have this fantastically dangerous [macroeconomic-financial] engine, which you don’t fully understand, therefore... you just cannot risk deregulating it. It has to be under government control, very tightly, all the time. How would you tell a layperson that that’s not a reasonable response?"

And Summers answered: "Well, in some ways it probably is a reasonable response. The last time [we had such a crisis, the Great Depression] – this is an overstatement – but this was why Harry Dexter White was a communist.... [A] very large number of thoughtful people who were communists in the 1930s, because they looked and they saw that just letting the market rip had ended in disaster.... [T]hey convinced themselves that having not just the financial system but the processes of production be controlled and planned as they were in the Soviet Union that had not suffered a similar unemployment problem, would produce a better outcome. And that did not prove to be conspicuously successful."

Were the social-democratic "mixed economies" that developed after World War II a different species of animal than either market classical liberalism or state socialist planning, or are the "mixed economies" just an incoherent mix of organizing principles?

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April 27: A couple of weeks ago Lawrence Summers said, of the period between 1968 and 1984:

Summers: "[It was] a Keynesian disaster... the crude application of totally demand-oriented policies that... produced an inflationary disaster..."

To what degree was he right and to what degree was he wrong about the episode of inflation that triggered the election of Reagan and Thatcher and the rightward political shift of the North Atlantic?

Memo Question for April 13, 2011

"How important were federal aid to the states and federal initiatives to resolve the housing crisis for the recovery of the U.S. economy post- 1933? Does this historical experience contain any lessons relevant to post-2007 policy (what if anything does it suggest that the federal government should have done differently)?