The trouble with the "liberal technicians", as I see it, is that they are caught in something of a no-man's-land between "old-fashioned hydraulic Keynesianism" and updated, "behavioural" neo-Keynesianism. The microfoundations of old-school hydraulic Keynesianism are no more plausible than those of the Lucas-Sargent-Prescott "fresh-water" rational expectations school, and hydraulic Keynesian models are less well empirically validated.
Saturday, November 20, 2010
Glad That's Settled
For the last couple of years, David Brooks and Paul Krugman, whose columns appear on the New York Times op-ed page, have been conducting a gentlemanly duke-out about the federal government's role in stimulating the economy. Luckily, a blogger at the "Economist" has finally straightened it all out: