David Warsh: “Expansionary austerity,” in bad times and good: "Now the funny thing is that the most successful episode of “expansionary austerity” to be found anywhere in recent history occurred in the United States, in the early 1990s, in the years after Bill Clinton defeated George H.W. Bush…. But all kinds of differences existed between the US economy in the early ’90s and European and US economies in 2010…. The US succeeded in staving off the budget cutters and so seems to have entered the early stages of an expansion. But Europe took the bait, and is now stumbling along…. There’s a world of difference between warning that such vulnerabilities exist and counseling quick action in hopes they will diminish. 'Expansionary austerity' is real enough. As is so often the case, it’s a matter of timing and degree."
Christina Romer: It Takes a Regime Shift: "The regime shift we are seeing in Japan is just the kind of bold action that might actually succeed in changing both inflation and growth expectations a substantial amount. As a result, it may be an effective tool for encouraging robust recovery and an end to deflation…. In the last century, there have been three times when major countries have hit the zero lower bound on safe, short-term rates: the United States in the 1930s; Japan in the 1990s and 2000s; and many advanced countries since 2008. The only true success story is the United States in the 1930s…. The fundamental feature of Roosevelt’s policy was a regime shift. This is the conclusion of an old paper by Peter Temin and Barry Wigmore, which I certainly failed to appreciate when it was published back in 1990, but which I now think is not just right, but prescient. Roosevelt’s actions were bold enough and different enough from what had been done before that people had no choice but to notice."
Nick Cohen on Niall Ferguson: More Niallism: Keynes opposed Versailles because he was a screaming queen | Juncture > IPPR | Arthur Goldhammer: Translating Tocqueville: The Constraints of Classicism | Jason Richwine is shocked, shocked that something that publishes John Derbyshire is white nationalist! |
Aaron Carroll: How much could we expect the Oregon Medicaid study to reduce blood pressure?:"The Oregon study… had fewer people, and less power… doesn’t seem able to define or quantify the hypertensive group in a similar way… [yet] seems to feel that it should be able to see a drop in systolic blood pressure that is higher than what was seen in the RAND HIE. And the study seems to think that we should be able to see those drops in groups with starting systolic blood pressures that are much closer to normal than those seen in the RAND HIE. It’s totally possible I’m wrong. If I am, I will post it right here. Tell me what I’m missing. Tell me why when we start with a population of people with much better control of their blood pressure, we should expect a larger absolute drop in systolic BP than the RAND HIE did. And tell me why this study should be powered to detect that difference with what seems like far fewer participants with hypertension."
Tim Duy: Fed Watch: "Gavyn Davies at the Financial Times questions the Federal Reserve's employment target: 'On the wider issue of general monetary policy, the behaviour of inflation and unemployment remain the key drivers, and here the Fed has a headache. Its forward guidance on unemployment is in danger of giving misleading signals about the need for tightening, and it probably needs to be changed.'I agree. Davies cites research indicating that recession-driven underemployment makes the unemployment rate a poor measure of resource utilization…. We need to be very careful in extrapolating the implications of the next policy move to future policy moves. The Fed has only a general strategy for exit, but policymakers lack enough certainty about the future to determine the exact nature of that exit. Still, even given that uncertainty, the current state of labor force utilization and inflation suggest that while the end of QE may occur this year, the first rate hike is not likely until some point well into the future."
Diego von Vacano: IQ and the Nativist Movement: "The academic and policy worlds have been roiled by last week’s announcement that a Heritage Foundation study on the cost of immigration reform was co-authored by Jason Richwine, who wrote a dissertation on the purported low IQ of immigrants…. I am stunned by the lack of rigor and intellectual depth evinced by Richwine’s dissertation. The work makes extremely simplistic assumptions about 'race', immigration, and the link between IQ and genetics…. One would have expected his advisors, Professors George Borjas, Richard Zeckhauser, and Christopher Jencks to have been more cognizant…. [S]uch shoddy work should not easily pass at the doctoral level…. “Hispanics” can be of any race… so that it is not possible to simply oppose “Hispanic” and “white” as if they were mutually exclusive categories…. The primitive binary taxonomy of “black vs. white” (emanating from the US one-drop rule) that has somehow become transformed into a spurious “white vs. non-white” Manichean logic is untenable…. The second point to be made is that the genetics and genomics revolution of the last two decades or so does have implications for what we understand as ‘race,’ but not in the way that people like Richwine want to argue."