M.C.K.: Learning from abroad: Don't forget Poland: "If you want to understand why Poland had a good crisis, you need to understand three things…. [T]he zloty was never pegged to the euro…. Of course, the devaluation of the zloty would not have been sufficient to keep Poland out of recession had it not been for an act of flagrant government intervention into the private financial system: the Vienna Initiative… [which] encouraged Western European lenders to maintain their exposures to Central and Eastern Europe…. The last thing you need to understand about Poland is that it practised robustly counter-cyclical fiscal policy…. Poland’s economic performance contains many interesting lessons for those who want to learn from it. But that requires examining all of the evidence, not just what is most convenient."
Robert Skidelsky: Models Behaving Badly: "[I]mprecision is one thing; the systematic overestimate of the economic recovery in Europe is quite another…. Two key mistakes stand out. The models used by all of the forecasting organizations dramatically underestimated the fiscal multiplier…. Second, they overestimated the extent to which quantitative easing (QE) by the monetary authorities – that is, printing money – could counterbalance fiscal tightening…. Forecasting organizations are finally admitting that they underestimated the fiscal multiplier…. [T]he evidence emerging from successive rounds of QE in the UK and the US suggests that while it did lower bond yields, the extra money… never reached the real economy…. Before they can do any good, the forecasters must go back to the drawing board, and ask themselves whether the theories of the economy underpinning their models are the right ones."
Robert Skidelsky: Keynes said one simple thing… « Keynesians of the world, unite!: "Every British Keynesian would agree with Jeffrey Sachs that the UK needs 'increased infrastructure and educational investments' and that spending cuts should not be the main tool of deficit reduction. But why does Professor Sachs insist on setting out his sensible stall in opposition to what he calls the 'Keynesian model'? Is it the odium theologicum of economics that makes natural allies attack each other? Keynes said one very simple thing. An economy hit by a serious shock to demand may remain stuck in a low investment trap. In these circumstances, the government needs to boost investment spending. Why does Prof Sachs find this so shocking? It’s exactly what he says!"
Felix Salmon: How capitalism breaks the web
Jonathan Chait: Why We're Going Over the Fiscal Cliff: "Everybody knows what happens in January. Both sides ought to be able to anticipate it and make the deal they could make then now. Business types have therefore assumed a December deal would happen. If this was a business deal between two rational people, that's what would happen. But we are not dealing with rational people here. We are dealing with House Republicans. As Republican Tom Cole gently put it, by way of describing his colleagues' implacable hatred of taxes, 'It's who they are. It's the air they breathe. It's what the Republican electorate produces.' If Boehner strikes a deal before January, Republicans will suspect he gave away revenue he could have fought for. But if he refuses, the House Republicans will see for themselves what happens. The revenue will go away on its own, over Boehner's objections. All Obama has to do is continue to make clear he will not under any circumstances extend any tax cuts on income over $250,000 a year. Then he has nearly all the revenue he needs, and he can offer Republicans a deal they would never walk away from. They might try to get that deal in December, but January remains the best bet."
Stan Collender: A Budget Crystal Ball for 2013 : Roll Call Opinion
Peter Woit: Quantum Mechanics for Mathematicians
Adam Davidson: God Save the British Economy