Lindsey Wilson writes:
Please look over your comment and make revisions (or let me know if everything is okay). The transcript wasn’t in good shape this time so we had to guess on some of the comments; therefore, please review your remarks carefully.
Bradford DeLong argued that the New Keynesian model is built on foundations of sand. The only intelligent way to view it is as an attempted exercise in mental consistency, a way to try to organize certain beliefs while leaving aside the reasons for those beliefs. Most of the time the fiscal multiplier is taken to be very low because the labor supply elasticity is low and markups are not strongly countercyclical, and almost all of the rest of the time the fiscal multiplier is very low because the Federal Reserve has a strong view about what nominal spending will be and acts to offset whatever fiscal policy initiatives Congress attempts. DeLong argued that there are times—namely, when the federal funds rate is essentially zero, and the effects of standard open-market operations on relative prices are unclear because cash and Treasury securities look like nearly perfect substitutes—when a combination of quantitative easing and banking recapitalization on the demand side of the credit channel, and of government asset purchases and guaranty policies on the supply side, together with fiscal expansion, have a role to play that they normally do not. It is hard, however, to justify any particular numbers that attempt to answer how much each of these supplements to normal monetary policy tools should be contributing.
It's accurate. It's embarrassing, however. This was definitely not me at my most coherent...