DeLong’s endearing false modesty

In this post, fiscal expansionist Brad DeLong says kind and admiring about austerian Ken Rogoff, concluding on a note that if taken literally is strikingly humble – not a characteristic we associate with DeLong. All the while, he is gently taking Rogoff’s argument to pieces: the humility smacks of false modesty, going almost too far to be good manners, but it’s clearly meant as good manners. Is he making up for joining in the schadenfreude over the Reinhart-Rogoff spreadsheet debacle? Is he just happy to be able to engage with a prominent austerian who, unlike many of the Chicago school (Fama, Cochrane, Lucas, Stephen Williamson …) understands Keynesian reasoning and has not erased from memory two hundred years of monetary theory? Maybe he just figures you can’t do nuance on the Web, so he slathers the flattery thick. It’s a little disconcerting to see somebody whose reflexive reaction to error is such that he used to run a “stupidist person alive” contest on his blog, to frame a fundamental disagreement about a matter of great import in such an elaborately respectful tone. Still, civil discourse is nice.

p.s. Read De Long’s post down to the comments – Robert Waldmann’s is spot on.

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More on flatlining


Joe Weisenthal at Business Insider posts this chart as an exoneration of the Obama administration’s recovery efforts. The Eurozone has the Eurocrisis, and Obama has Congress, so I suppose it’s a fair match.

Jeff Weintraub then packages the chart together with a riff on Nick Clegg’s decision to form a coalition with the Conservatives rather than Labour. Brad deLong sums it up with a new version of the chart (below) and the headline “Nick Clegg Is a Wizard! He Makes Economic Recovery Disappear!

Colbert interviews Thomas Herndon, the Reinhart-Rogoff slayer

A great week for the University of Massachusetts Economics PhD program – I’m glad to say I did mine there.

Steven Colbert “reports” on Reinhart & Rogoff, and then interviews Thomas Herndon, the UMass grad student who uncovered the weakness of Reinhart & Rogoff’s correlation & utter absence of a cliff at 90% debt:GDP (if you want to go beyond correlation to causation in Reinhart-Rogoff, see Paul Krugman, and also Ugo Panizza and Andrea Presbitero).

If licensing barriers make it hard to see the Colbert Report on the web where you are, there may be a browser plug-in to help you. Xtremis Reaction points us to one, which works, at least with Firefox in the UK.

Cyprus and re-regulation

The Tax Justice Network dishes dirt on what the “financial services” industry of Cyprus was selling. So will the EU really close this business down in Cyprus? And will it roll on from that to the many other tax havens (or what the TJN people call “secrecy jurisdictions”) either in the EU or under the protection of various EU states? It could, in the end, go that way.

We can hope that this is a step on the road to bringing the financial sector under control. Continue reading

Skills and the response to crisis

My paper with Andrea Filippetti is now available from Birkbeck’s Centre for Innovation Management Research. Bottom line: European countries with a combination of good short-term unemployment insurance and vocational training participation were less likely to see reductions in private sector investment in innovation in the first year of the financial crisis: having just one of these was no help, and job security, the bĂȘte noire of neo-liberalism, made no difference. Another way of putting it is that, in this particular case (investment in innovation, during the financial crisis), it is the security part of the flexicurity model that provides the benefit. This is consistent with the logic of Estevez-Abe, Iversen & Soskice’s chapter in Hall & Soskice’s Varieties of Capitalism.