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Have Keynesian Predictions Been Correct?

jimtimmy
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12/21/2011 12:49:43 PM
Posted: 4 years ago
From my Blog:

Well, Paul Krugman likes to say they have. And, today on his blog, he finally laid out the exact predictions that his version of Keynesian Economics has been so right on:

"1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.
2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.
3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place."

I'm glad he finally laid out a straight forward list so we can see how amazing the Keynesian predictions have actually been. Remember, Krugman is claiming that all these predictions and unique to Keynesian models. Let us evaluate:

1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.

So, the idea here is that interest rates have not skyrocketed, despite large budget deficits. There is no doubt that interest rates have no skyrocketed. However, the real question is whether or not Krugman and friends were unique in making this prediction.

The answer here is no. In fact, it was the Clinton administration that argued that deficits would increase intrest rates, and it was conservative, supply side economists who argued that they would not. In fact, Alan Reynolds, a supply side economist at the ultra-libertarian and anti Keynesian CATO institute, concluded that interest rates did not increase deficits.

So, this prediction is not at all unique to the Krugman and fellow Keynesian Economists.

2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.

The point here is that inflation has not yet exploded, despite a large increase in money creation. This is a bit dishonest on Krugman's part. Most of the economists who predicted massive inflation by 2011 were pessimistic Austrians.

The more mainstream economists who disagree with Krugman, like Scott Sumner, John Taylor, Tyler Cowen, Greg Mankiw, etc, certainly did not predict hyperinflation in 2011. Even the economists who predicted a massive increase in inflation said that it could take until 2012, to be fair.

And, to make matters even more interesting, Krugman said this in August about inflation:

"OK, someone is going to point out that inflation has run somewhat higher than I predicted; yes, it has. But I think the figure above shows that the outcome has nonetheless been a lot closer to what people like me said would happen than to what you would have expected from reading the WSJ."

So, Krugman is even conceding that inflation has been higher than he predicted, and his only counter to this is basically that, while that is true, inflation has been closer to his prediction than it has been to hyperinflation.

So, all in all, even Krugman admits the Keynesian prediction has been somewhat off here. Even if it wasn't, very few, if any, mainstream economists of any school were predicting massive inflation in 2011. So, again, this is hardly a big win for Keynes.

3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place.

This is very questionable. Where exactly is he talking about?

The USA?

The deficit is still running at around 10% of GDP here, hardly "austerity".

Britain?

Scott Sumner said it best with regards to Britain:

"In fairness, the data in the article makes a mockery of all the claims that Britain is trying to engage in "expansionary austerity." Since when is a budget deficit of 8.4% of GDP three years after a recession "austerity?" Because the deficit used to be 11.2% of GDP a few years back? Yes, and the term "sobriety" describes a drunk who throws back 8 whiskey sours on Saturday night, because on Friday night he had 11 drinks. So I have no complaints about the fiscal "austerity," but I'm still trying to figure out what's wrong with Britain?"

So, a country still running deficits over 8% of GDP is hardly an example of "austerity".

Ireland?

Again, this is a very complex situation, and it is hardly a pure vindication of Krugman and Keynes. In fact, in many ways, Ireland has defied Keynesian predictions of doom and despair following austerity.

If not these countries, I don't know where Krugman is talking about when he says "expansionary austerity" has failed.

Even if it has, there have been many on the non Keynesian side of economics who have criticized the whole idea that austerity will boost short term growth. I am not convinced that austerity leads to short term growth, and I am certainly not a follower of Keynes. I believe Tyler Cowen, Scott Sumner, Greg Mankiw, etc have expressed similiar sentiments.

So this point is not even clearly true, and, even if it is, it is still not all that unique to Krugman's version of Keynes.

All in all, none of these predictions serve as a "spectacular vindication" of Keynes or Krugman. In fact, all of above predictions were made by many non Keynesians, as most of them are not all that surprising. Some of the predictions, like the failure of austerity, are not even clearly true.

So, to answer the question I posed in the title, no, Keynesian predictions have not been uniquely correct.
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Ore_Ele
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12/21/2011 3:17:24 PM
Posted: 4 years ago
The question in the title was "Have Keynesian Predictions Been Correct?"

Then you state, "So, to answer the question I posed in the title, no, Keynesian predictions have not been uniquely correct."

Do you see the falacy here?
"Wanting Red Rhino Pill to have gender"
jimtimmy
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12/21/2011 3:20:17 PM
Posted: 4 years ago
At 12/21/2011 3:17:24 PM, Ore_Ele wrote:
The question in the title was "Have Keynesian Predictions Been Correct?"

Then you state, "So, to answer the question I posed in the title, no, Keynesian predictions have not been uniquely correct."

Do you see the falacy here?

Ya. But, let's not play semantics here.

I think most people who read this will realize what I meant.
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darkkermit
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12/21/2011 3:53:21 PM
Posted: 4 years ago
I find it strange that one can simultaneous call the Austrian economists brilliant for predicting the housing bubble, but not fault them for predicting incorrectly that inflation will occur. That's kind of a double standard. I'm sure If a housing bubble didn't occur, then it would have been just been "pessimistic Austrian economists" that predicted it.

To be fair, we still have time to wait to see If inflation does occur. I'd give it a few more years until we can accurately predict whether the Austrians were wrong or not.
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jimtimmy
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12/21/2011 4:00:22 PM
Posted: 4 years ago
At 12/21/2011 3:53:21 PM, darkkermit wrote:
I find it strange that one can simultaneous call the Austrian economists brilliant for predicting the housing bubble, but not fault them for predicting incorrectly that inflation will occur. That's kind of a double standard. I'm sure If a housing bubble didn't occur, then it would have been just been "pessimistic Austrian economists" that predicted it.

To be fair, we still have time to wait to see If inflation does occur. I'd give it a few more years until we can accurately predict whether the Austrians were wrong or not.

Huh?

I did fault Austrian economists for inflation not coming yet in a big way. However, nobody in the mainstream predicted massive inflation in 2011 (no, Austrian School is not really in the mainstream).

So, it is dishonest for Keynesians to claim that the fact that we don't have super high inflation proves how right Keynes was.

This is especially true since inflation has run higher than all of the big Keynesians predicted.

Anyways, all I am pointing out is that people like Krugman are being very dishonest when they claim that these things prove how Keynesian Economics is so right.

When, in fact, that couldn't be further from the truth.
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darkkermit
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12/21/2011 4:11:41 PM
Posted: 4 years ago
At 12/21/2011 4:00:22 PM, jimtimmy wrote:

I did fault Austrian economists for inflation not coming yet in a big way. However, nobody in the mainstream predicted massive inflation in 2011 (no, Austrian School is not really in the mainstream).

Keynesian economics is mainstream economics.

I'm comparing Austrian vs. Keynesian though. Many Austrians and Keynesians predicted the housing bubble. I don't think anybody from the Chicago school of economics predicted the housing bubble, so their methodology is likely flawed

So either the Keynesians are right or the Austrians are right. They both predicted the housing crisis, but for different reasons. One can be right and not using sound logic.

Since the Keynesians predicted the housing crisis AND predicted that the increase in the money supply would not cause massive inflation, the Keynsians are looking stronger. Again, perhaps they will be proven wrong. Time will only tell. But I remember telling you earlier how Mises predicted that hyperinflation would occur If Great Britian went ff the gold standard. It didn't happen.

Anyways, all I am pointing out is that people like Krugman are being very dishonest when they claim that these things prove how Keynesian Economics is so right.

When, in fact, that couldn't be further from the truth.

Well, again. We have mainstream economists being wrong for not predicting the housing crisis. We have austrians wrong for predicting hyperinflation. So we're left with Keynesian as the superior model. Technically neo-Keynesian and post -Keynesian since there are problems with classical Keynesianism as the 1970s showed.

Hail Lord Keynes!

Again, you can't exactly praise mainstream economists when they failed to predict the housing crisis.
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darkkermit
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12/21/2011 4:24:50 PM
Posted: 4 years ago
Also it should be noted that Krugman isn't the god of Keynesian economics that everybody thinks he is.

His original research is in International Trade Theory. His noble prize winnings wasn't in Keynesian economics but for his study on New World Trade theory, which takes into account economics of scale and networking effects that the traditional model of comparative advantage doesn't.
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jimtimmy
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12/21/2011 4:27:14 PM
Posted: 4 years ago
At 12/21/2011 4:11:41 PM, darkkermit wrote:
At 12/21/2011 4:00:22 PM, jimtimmy wrote:

I did fault Austrian economists for inflation not coming yet in a big way. However, nobody in the mainstream predicted massive inflation in 2011 (no, Austrian School is not really in the mainstream).

Keynesian economics is mainstream economics.

Keynesian Economics is part of Mainstream Economics. Neoclassical econonomics is also part of Mainstream economics. This is an undeniable fact.

This is how "Mainstream Economics" is defined:

"Mainstream economics is a loose term used to refer to widely-accepted economics as taught in prominent universities and in contrast to heterodox economics. It has been associated with neoclassical economics[1] and with the neoclassical synthesis, which combines neoclassical methods and Keynesian approach macroeconomics."


I'm comparing Austrian vs. Keynesian though. Many Austrians and Keynesians predicted the housing bubble. I don't think anybody from the Chicago school of economics predicted the housing bubble, so their methodology is likely flawed

Now, we both know austrians were much more specific and accurate in their predictions.

The Keynesians were not the ones who predicted the Housing Crash.

And, one thing that happened that goes against a school does not discredit a school. I don't know if any Chicago School economists predicted the crash. But, I do know that the Chicago School and the Austrian School predicted Stagflation, which NO Keynesian predicted, because it was impossible according to their models.


So either the Keynesians are right or the Austrians are right. They both predicted the housing crisis, but for different reasons. One can be right and not using sound logic.

No, one general prediction from Krugman does not mean Keynesians predicted the crisis. Austrians did predict the crisis with incredible accuracy.

We can also go back to 1929, when Mises and Hayek predicted a crash and Keynes lost a lot of money.


Since the Keynesians predicted the housing crisis AND predicted that the increase in the money supply would not cause massive inflation, the Keynsians are looking stronger. Again, perhaps they will be proven wrong. Time will only tell. But I remember telling you earlier how Mises predicted that hyperinflation would occur If Great Britian went ff the gold standard. It didn't happen.

As I said, the keynesian school did not predict the housing crisis. One general prediction from Krugman is not an entire school predicting a crisis. If you want to see a truly amazing prediction, you can look at Peter Schiff and Ron Paul in the early to mid 2000s... or Milton Friedman and Hayek before Stagflation... or Mises and Hayek before 1929... Keynesians are not included among the great predictors.



Anyways, all I am pointing out is that people like Krugman are being very dishonest when they claim that these things prove how Keynesian Economics is so right.

When, in fact, that couldn't be further from the truth.

Well, again. We have mainstream economists being wrong for not predicting the housing crisis. We have austrians wrong for predicting hyperinflation. So we're left with Keynesian as the superior model. Technically neo-Keynesian and post -Keynesian since there are problems with classical Keynesianism as the 1970s showed.

I thought Keynesians were mainstream, and they are. And, they didn't predict the crisis.

And, let's not forget that inflation has been higher than Keynesians predicted. No serious mainstream economist, and not even many austrians, predicted hyperinflation.

So, the fact that hyperinflation has not occurred does not mean Keynesians were right about anything. So, Keynesians were actually wrong about the housing crisis AND inflation.

Most Christians don't believe the world will end in 2012. And, they're going to be right. Does that mean that Christians were right about everything?


Hail Lord Keynes!

Again, you can't exactly praise mainstream economists when they failed to predict the housing crisis.

Again, you pointed out that Keynesians are mainstream. They didn't predict the crisis. Inflation has been higher than they predicted.

Let's also be frank here. They were wrong about the stimulus. You can say that they all wanted it to be bigger. But, they would have said that no matter how big it was.

With the stimulus, Keynesians played the "heads I win, tails you lose" game. Basically, they all said that it was good, but too small. This way, if it worked, as their models would predict, they could declare victory.

If it failed, as it did, they could still say they wanted a bigger stimulus.

So, yes, the stimulus also goes against the Keynesians, that is if you can see through their game.
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darkkermit
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12/21/2011 5:04:14 PM
Posted: 4 years ago
At 12/21/2011 4:27:14 PM, jimtimmy wrote:





I'm comparing Austrian vs. Keynesian though. Many Austrians and Keynesians predicted the housing bubble. I don't think anybody from the Chicago school of economics predicted the housing bubble, so their methodology is likely flawed


Now, we both know austrians were much more specific and accurate in their predictions.


The Keynesians were not the ones who predicted the Housing Crash.

And, one thing that happened that goes against a school does not discredit a school. I don't know if any Chicago School economists predicted the crash. But, I do know that the Chicago School and the Austrian School predicted Stagflation, which NO Keynesian predicted, because it was impossible according to their models.

Know, I don't think that the Chicago School should be discredited completely, but they do need to realize that their are some serious problems with their theories If they got things so wrong. Keynesian economists were wrong about things as well. The Philips Curve was wrong. That's why Neo-Keynesian and Post-Keynesian has replaced classical Keynesian economics.


No, one general prediction from Krugman does not mean Keynesians predicted the crisis. Austrians did predict the crisis with incredible accuracy.

Krugman isn't the god of Keynesians. Others predicted it as well. I don't see why you say that the Austrians prediced it more "accurately" then the Keynesians. They were more loud and sounded much more confident then Krugman, but that does not equal more accurate.

As I said, the keynesian school did not predict the housing crisis. One general prediction from Krugman is not an entire school predicting a crisis. If you want to see a truly amazing prediction, you can look at Peter Schiff and Ron Paul in the early to mid 2000s... or Milton Friedman and Hayek before Stagflation... or Mises and Hayek before 1929... Keynesians are not included among the great predictors.

Also these:
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...

They certainly are under the list of great predictors.Yes, the Chicago school made some good predictions as well. But Keynesian predicted the harms that would result from the harsh treatment of Germany after WWI:

http://en.wikipedia.org...

Also those nations that followed Keynes advice were able to get out of the Great Depression quicker. Those nations that follow Keynes's advice have seen recessions have less of an impact.

I thought Keynesians were mainstream, and they are. And, they didn't predict the crisis.

Keynesian is a spectrum.

And, let's not forget that inflation has been higher than Keynesians predicted. No serious mainstream economist, and not even many austrians, predicted hyperinflation.

Peter Schiff definitely believes in hyperinflation or at least serious stagflation. Robert murphy also an advocate of stagflation.

Your just ducking the issue. I'm sure not every austrian economist predicted the housing bubble either. Please show me articles where austrians said that inflation would not occur. When the Austrians are right, they are right. But yea, If they are wrong its just a bunch of nutjobs out there. If the austrian synthesis is correct, why are they even predicting inflation in the first place?

So, the fact that hyperinflation has not occurred does not mean Keynesians were right about anything. So, Keynesians were actually wrong about the housing crisis AND inflation.

Keynesians economists actually usually shoot for some inflation. Low inflation, but inflation nonetheless. Inflation has actually been quite low.

Most Christians don't believe the world will end in 2012. And, they're going to be right. Does that mean that Christians were right about everything?

We don't know yet since 2012 hasn't happened :p.

Again, you pointed out that Keynesians are mainstream. They didn't predict the crisis. Inflation has been higher than they predicted.

Yes, but people go off into their own special fields in economics. Those that looked more into keynesian economics were more likely to predict the crisis rather than someone who went more into chicago.

Let's also be frank here. They were wrong about the stimulus. You can say that they all wanted it to be bigger. But, they would have said that no matter how big it was.

Not sure what the consensus was. The bank bailouts did prevent the collapse of the financial sector. The problem with economics is that its impossible to say whether things helped or didn't, since we don't know what would have happened if another option was taken. Yea, there graph is quite laughable though:
http://www.estatevaults.com...

Depends what stimulus we're referring to. I agree that deficit sending doesn't make much sense If your already in tons of debt.

With the stimulus, Keynesians played the "heads I win, tails you lose" game. Basically, they all said that it was good, but too small. This way, if it worked, as their models would predict, they could declare victory.

If it failed, as it did, they could still say they wanted a bigger stimulus.

So, yes, the stimulus also goes against the Keynesians, that is if you can see through their game.

Yea, I'll agree with you on that one. Although there are some models that predicted that they were wrong. We did avoid a Great Depression though. I mean the mess was actually quite big. They deserve credit for that. I also enjoyed Murphy's article as well:
http://mises.org...
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jimtimmy
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12/21/2011 5:35:45 PM
Posted: 4 years ago
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:





I'm comparing Austrian vs. Keynesian though. Many Austrians and Keynesians predicted the housing bubble. I don't think anybody from the Chicago school of economics predicted the housing bubble, so their methodology is likely flawed


Now, we both know austrians were much more specific and accurate in their predictions.


The Keynesians were not the ones who predicted the Housing Crash.

And, one thing that happened that goes against a school does not discredit a school. I don't know if any Chicago School economists predicted the crash. But, I do know that the Chicago School and the Austrian School predicted Stagflation, which NO Keynesian predicted, because it was impossible according to their models.

Know, I don't think that the Chicago School should be discredited completely, but they do need to realize that their are some serious problems with their theories If they got things so wrong. Keynesian economists were wrong about things as well. The Philips Curve was wrong. That's why Neo-Keynesian and Post-Keynesian has replaced classical Keynesian economics.

Okay. But, you ignore that the Keynesian didn't predict the Housing Crash either. And, unlike Stagflation, the housing crash was not impossible under Chicago Models. It wasn't predicted, but it wasnt some thing that Chicago economists had said was impossible either. In fact, chicago economists did predict a recession, just a lighter one.

No, their predictions weren't perfect here, but it was far from enough to warrant major changes.




No, one general prediction from Krugman does not mean Keynesians predicted the crisis. Austrians did predict the crisis with incredible accuracy.

Krugman isn't the god of Keynesians. Others predicted it as well. I don't see why you say that the Austrians prediced it more "accurately" then the Keynesians. They were more loud and sounded much more confident then Krugman, but that does not equal more accurate.

Well, more confident does mean more accurate if it does happen. They were also more specific than Krugman.

And, outside of a general prediction from Krugman and possibly a couple others, I have no reason to believe that a large number of Keynesian were making reall accurate predictions about this. This is because they weren't.



As I said, the keynesian school did not predict the housing crisis. One general prediction from Krugman is not an entire school predicting a crisis. If you want to see a truly amazing prediction, you can look at Peter Schiff and Ron Paul in the early to mid 2000s... or Milton Friedman and Hayek before Stagflation... or Mises and Hayek before 1929... Keynesians are not included among the great predictors.

Also these:
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...
http://en.wikipedia.org...

They certainly are under the list of great predictors.Yes, the Chicago school made some good predictions as well. But Keynesian predicted the harms that would result from the harsh treatment of Germany after WWI:

http://en.wikipedia.org...

I looked at all of those links. Only a couple of those guys (three, I think) predicted a crisis... one of them was named "Dr. Doom", because of always making negative predictions.

Again, I could find you some Chicago, Neo classical economists who predicted the criss... that does not mean that an entire school was predicting the crisis.

And, that was a good book, but nothing in it vindicated modern Keynesian ideas.


Also those nations that followed Keynes advice were able to get out of the Great Depression quicker. Those nations that follow Keynes's advice have seen recessions have less of an impact.

Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty



I thought Keynesians were mainstream, and they are. And, they didn't predict the crisis.

Keynesian is a spectrum.

And, let's not forget that inflation has been higher than Keynesians predicted. No serious mainstream economist, and not even many austrians, predicted hyperinflation.

Peter Schiff definitely believes in hyperinflation or at least serious stagflation. Robert murphy also an advocate of stagflation.

Stagflation is still possible. Not that it will definetley happen...


Your just ducking the issue. I'm sure not every austrian economist predicted the housing bubble either. Please show me articles where austrians said that inflation would not occur. When the Austrians are right, they are right. But yea, If they are wrong its just a bunch of nutjobs out there. If the austrian synthesis is correct, why are they even predicting inflation in the first place?

I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.

I am not gonna defend every tenant of Austrianism.


So, the fact that hyperinflation has not occurred does not mean Keynesians were right about anything. So, Keynesians were actually wrong about the housing crisis AND inflation.

Keynesians economists actually usually shoot for some inflation. Low inflation, but inflation nonetheless. Inflation has actually been quite low.

No, it has been about medium, higher than Keynesian predicted.


We don't know yet since 2012 hasn't happened :p.

True, but if it doesn't happen, can we say Christians were right about everything.


Again, you pointed out that Keynesians are mainstream. They didn't predict the crisis. Inflation has been higher than they predicted.

Yes, but people go off into their own special fields in economics. Those that looked more into keynesian economics were more likely to predict the crisis rather than someone who went more into chicago.

There is no evidence for this claim. Even if it was true, it wouldnt mean much, as most Keynesians didn't predict the crisis.




Not sure what the consensus was. The bank bailouts did prevent the collapse of the financial sector. The problem with economics is that its impossible to say whether things helped or didn't, since we don't know what would have happened if another option was taken. Yea, there graph is quite laughable though:
http://www.estatevaults.com...

I am really talking about the ARRA, an absurd failure


Depends what stimulus we're referring to. I agree that deficit sending doesn't make much sense If your already in tons of debt.

ARRA




Yea, I'll agree with you on that one. Although there are some models that predicted that they were wrong. We did avoid a Great Depression though. I mean the mess was actually quite big. They deserve credit for that. I also enjoyed Murphy's article as well:
http://mises.org...

I liked that article too.
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darkkermit
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12/21/2011 6:04:58 PM
Posted: 4 years ago
At 12/21/2011 5:35:45 PM, jimtimmy wrote:

Okay. But, you ignore that the Keynesian didn't predict the Housing Crash either. And, unlike Stagflation, the housing crash was not impossible under Chicago Models. It wasn't predicted, but it wasnt some thing that Chicago economists had said was impossible either. In fact, chicago economists did predict a recession, just a lighter one.

Stagflation is possible under Keynesian economics under cost-push inflation:
http://en.wikipedia.org...
No, their predictions weren't perfect here, but it was far from enough to warrant major changes.


Which chicago economists predicted the crash? Based on what analysis? WOuldn't it contradict the efficient-market hypothesis?

Well, more confident does mean more accurate if it does happen. They were also more specific than Krugman.

No it doesn't. Many talk-show hosts constantly make predictions wrong and act with confidence about it. Its part of why people watch them, because they are confident.

And, outside of a general prediction from Krugman and possibly a couple others, I have no reason to believe that a large number of Keynesian were making reall accurate predictions about this. This is because they weren't.

I already showed you a list of Keynesian economists. I don't know all the economists that predicted the crisis, what their school of thought was, and what percentage of the school believed that. And neither do you. And there's no data to support it. I can show you my anecedotes. You can show me yours. And at the end of the day we accomplish nothing.

I looked at all of those links. Only a couple of those guys (three, I think) predicted a crisis... one of them was named "Dr. Doom", because of always making negative predictions.

Yea, the Austrian economists are actually kind of like that as well.

Again, I could find you some Chicago, Neo classical economists who predicted the criss... that does not mean that an entire school was predicting the crisis.

Who did?

And, that was a good book, but nothing in it vindicated modern Keynesian ideas.

You read it? It does vindicate Keynes in his predictive powers.


Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty

http://en.wikipedia.org...
Those that followed Keynesian policies were better off. You can read Robert Murphy's book to try to discredit the new deal, by showing that the one data point is wrong, but once you see consistent improvement by those nations that took keynes advice, and followed it more by the book, one wonders.

Stagflation is still possible. Not that it will definetley happen...

Oh yes, I agree. Time will tell.

I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.

I am not gonna defend every tenant of Austrianism.

But if their methodology is correct, then why pick and choose?

There is no evidence for this claim. Even if it was true, it wouldnt mean much, as most Keynesians didn't predict the crisis.

Keynesian economists are much more likely to look at the problems with the financial sectors, psychologically problems, etc. The fact that many of the Keynesians were looking at problems in the financial sector, and how these problems can lead to a recessions vindicates Keynes to an extent.

I am really talking about the ARRA, an absurd failure

Agreed. The problem is that the US government, both at the state and federal level, has too much debt and If we spend anymore then it reduces confidence in the dollar. The ARRA had some shady deals in it to. The US needs a plan like Paul Ryan's. It's a shame that so many are against it.
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jimtimmy
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12/21/2011 7:42:06 PM
Posted: 4 years ago
At 12/21/2011 6:04:58 PM, darkkermit wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:

Okay. But, you ignore that the Keynesian didn't predict the Housing Crash either. And, unlike Stagflation, the housing crash was not impossible under Chicago Models. It wasn't predicted, but it wasnt some thing that Chicago economists had said was impossible either. In fact, chicago economists did predict a recession, just a lighter one.

Stagflation is possible under Keynesian economics under cost-push inflation:
http://en.wikipedia.org...

I understand that post Stagflation Keynesians tried to explain stagflation in hindsight.

However, the pre stagflation Keynesians were saying that stagflation couldn't happen.

Cost-push inflation was largely a hindsight explanation.

I would definetley argue that Friedman/Phelps or the AUstrian explanation are the only explanations taht really line up with reality on stagflation.

No, their predictions weren't perfect here, but it was far from enough to warrant major changes.


Which chicago economists predicted the crash? Based on what analysis? WOuldn't it contradict the efficient-market hypothesis?

Lee Ohanian offers a pretty good explanation from the neoclassical standpoint, and there are others:

http://pubs.aeaweb.org...

And, this is a pretty interesting explanation of business fluctuations from a "market monetarist" PoV... which is modeled after Friedman's monetarism:

http://www.themoneyillusion.com...



Well, more confident does mean more accurate if it does happen. They were also more specific than Krugman.

No it doesn't. Many talk-show hosts constantly make predictions wrong and act with confidence about it. Its part of why people watch them, because they are confident.

Well, if I say that I am 100% certain x will happen and someone else says they are 50% certain that x will happen. And then x does happen, I would say I was more accurate.


And, outside of a general prediction from Krugman and possibly a couple others, I have no reason to believe that a large number of Keynesian were making reall accurate predictions about this. This is because they weren't.

I already showed you a list of Keynesian economists. I don't know all the economists that predicted the crisis, what their school of thought was, and what percentage of the school believed that. And neither do you. And there's no data to support it. I can show you my anecedotes. You can show me yours. And at the end of the day we accomplish nothing.

Agreed. So, this whole point is moot.


I looked at all of those links. Only a couple of those guys (three, I think) predicted a crisis... one of them was named "Dr. Doom", because of always making negative predictions.

Yea, the Austrian economists are actually kind of like that as well.

Ya, I am not nearly as "austrian" as I once was. I still think their explanation of the business cycle has some good points. I also think that the Austrian Business Cycle is the best at explaining the 2008 crisis, but I also think many things are wrong.


Again, I could find you some Chicago, Neo classical economists who predicted the criss... that does not mean that an entire school was predicting the crisis.

Who did?

I don't know of any. However, I don't think you would disagree that the only school that, as an entire school, was predicting the crisis was the Austrians... maybe the marxists too, lol.

A couple Keynesians may have too, but the school as a whole certainly was not.


And, that was a good book, but nothing in it vindicated modern Keynesian ideas.

You read it? It does vindicate Keynes in his predictive powers.

I read about it, lol. I had heard of it before.

But, most of the predictions were actually fairly free market, warning against price controls and inflation.

The book wasn't all that predictative, it was good though.

Plus, Keynes had different views come 1929, and his prediction there failed very much.




Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty

http://en.wikipedia.org...
Those that followed Keynesian policies were better off. You can read Robert Murphy's book to try to discredit the new deal, by showing that the one data point is wrong, but once you see consistent improvement by those nations that took keynes advice, and followed it more by the book, one wonders.

First, correlation does not equal causation... reverse causation is very much possible here...

Second, that chart is much more a victory for Monetarism than Keynesianism. Keynesians, I would think, are much more fixated on fiscal policy.

Monetarists are more about things like the Gold Standard.




Stagflation is still possible. Not that it will definetley happen...

Oh yes, I agree. Time will tell.

We will see.


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.

I am not gonna defend every tenant of Austrianism.

But if their methodology is correct, then why pick and choose?

As I said above, I think their business cycle was good at explaining 2008... doesnt mean it is all correct.



There is no evidence for this claim. Even if it was true, it wouldnt mean much, as most Keynesians didn't predict the crisis.

Keynesian economists are much more likely to look at the problems with the financial sectors, psychologically problems, etc. The fact that many of the Keynesians were looking at problems in the financial sector, and how these problems can lead to a recessions vindicates Keynes to an extent.

I don't see what you are saying here. I don't see what here vindicates keynes.



I am really talking about the ARRA, an absurd failure

Agreed. The problem is that the US government, both at the state and federal level, has too much debt and If we spend anymore then it reduces confidence in the dollar. The ARRA had some shady deals in it to. The US needs a plan like Paul Ryan's. It's a shame that so many are against it.

Agreed
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DaveElectric
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12/21/2011 9:07:30 PM
Posted: 4 years ago
1)There is no such thing as a "liquidity trap". First of all, the idea ignores the role of time preference in people's decision to invest. The idea at its very core demoralizes saving which is an economic activity that is necessary for an economy to function especially when prior malinvestment occured. Second, there is no such thing as "perfect elasticity" in the demand for a good. Any theory economic or scientific that contains some kind of singularity in it is clearly wrong on its face. Singularities don't exist in reality. They are mathematical fantasies.
2)Complete nonsense. Never mind the fact that gold prices are still going up.....when the monetary base increases inflation MUST happen. Also, the economy is not static. Even when inflation is happening economic activity is still going on. The price of goods can stay the same or go down despite the devaluation of currency. Also, saving money causes deflation. And this doesn't count as a "liquidity trap". The only thing it proves is that people want to spend money in the future.
3)Who on the opposite side didn't predict this? Non-Keynesians (most notably Peter Schiff who is an Austrian) already predicted this and said that such painful corrections were necessary. Krugman is setting up a straw man arguement. First he and his ilk argued that we should try to avoid painful corrections in the economy now he is complaining that austerity measures lead to painful corrections as though his opponents weren't argueing for such corrections and were unware of such consequences.

That's sleezy and he knows it.
16kadams
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12/22/2011 10:06:46 PM
Posted: 4 years ago
At 12/21/2011 12:49:43 PM, jimtimmy wrote:
From my Blog:




Well, Paul Krugman likes to say they have. And, today on his blog, he finally laid out the exact predictions that his version of Keynesian Economics has been so right on:

"1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.
2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.
3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place."


I'm glad he finally laid out a straight forward list so we can see how amazing the Keynesian predictions have actually been. Remember, Krugman is claiming that all these predictions and unique to Keynesian models. Let us evaluate:

1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.


So, the idea here is that interest rates have not skyrocketed, despite large budget deficits. There is no doubt that interest rates have no skyrocketed. However, the real question is whether or not Krugman and friends were unique in making this prediction.

The answer here is no. In fact, it was the Clinton administration that argued that deficits would increase intrest rates, and it was conservative, supply side economists who argued that they would not. In fact, Alan Reynolds, a supply side economist at the ultra-libertarian and anti Keynesian CATO institute, concluded that interest rates did not increase deficits.

So, this prediction is not at all unique to the Krugman and fellow Keynesian Economists.




2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.


The point here is that inflation has not yet exploded, despite a large increase in money creation. This is a bit dishonest on Krugman's part. Most of the economists who predicted massive inflation by 2011 were pessimistic Austrians.

The more mainstream economists who disagree with Krugman, like Scott Sumner, John Taylor, Tyler Cowen, Greg Mankiw, etc, certainly did not predict hyperinflation in 2011. Even the economists who predicted a massive increase in inflation said that it could take until 2012, to be fair.

And, to make matters even more interesting, Krugman said this in August about inflation:


"OK, someone is going to point out that inflation has run somewhat higher than I predicted; yes, it has. But I think the figure above shows that the outcome has nonetheless been a lot closer to what people like me said would happen than to what you would have expected from reading the WSJ."

So, Krugman is even conceding that inflation has been higher than he predicted, and his only counter to this is basically that, while that is true, inflation has been closer to his prediction than it has been to hyperinflation.

So, all in all, even Krugman admits the Keynesian prediction has been somewhat off here. Even if it wasn't, very few, if any, mainstream economists of any school were predicting massive inflation in 2011. So, again, this is hardly a big win for Keynes.



3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place.


This is very questionable. Where exactly is he talking about?

The USA?

The deficit is still running at around 10% of GDP here, hardly "austerity".

Britain?

Scott Sumner said it best with regards to Britain:

"In fairness, the data in the article makes a mockery of all the claims that Britain is trying to engage in "expansionary austerity." Since when is a budget deficit of 8.4% of GDP three years after a recession "austerity?" Because the deficit used to be 11.2% of GDP a few years back? Yes, and the term "sobriety" describes a drunk who throws back 8 whiskey sours on Saturday night, because on Friday night he had 11 drinks. So I have no complaints about the fiscal "austerity," but I'm still trying to figure out what's wrong with Britain?"


So, a country still running deficits over 8% of GDP is hardly an example of "austerity".


Ireland?


Again, this is a very complex situation, and it is hardly a pure vindication of Krugman and Keynes. In fact, in many ways, Ireland has defied Keynesian predictions of doom and despair following austerity.


If not these countries, I don't know where Krugman is talking about when he says "expansionary austerity" has failed.

Even if it has, there have been many on the non Keynesian side of economics who have criticized the whole idea that austerity will boost short term growth. I am not convinced that austerity leads to short term growth, and I am certainly not a follower of Keynes. I believe Tyler Cowen, Scott Sumner, Greg Mankiw, etc have expressed similiar sentiments.

So this point is not even clearly true, and, even if it is, it is still not all that unique to Krugman's version of Keynes.


All in all, none of these predictions serve as a "spectacular vindication" of Keynes or Krugman. In fact, all of above predictions were made by many non Keynesians, as most of them are not all that surprising. Some of the predictions, like the failure of austerity, are not even clearly true.

So, to answer the question I posed in the title, no, Keynesian predictions have not been uniquely correct.

Just add a link instead of this to get views. look at my signature lol
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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12/22/2011 10:07:55 PM
Posted: 4 years ago
At 12/21/2011 3:53:21 PM, darkkermit wrote:
I find it strange that one can simultaneous call the Austrian economists brilliant for predicting the housing bubble, but not fault them for predicting incorrectly that inflation will occur. That's kind of a double standard. I'm sure If a housing bubble didn't occur, then it would have been just been "pessimistic Austrian economists" that predicted it.

To be fair, we still have time to wait to see If inflation does occur. I'd give it a few more years until we can accurately predict whether the Austrians were wrong or not.

they predicted it I thought. Ron paul did (hayek supporter) he predicted everything
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
Teafood
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1/15/2012 1:06:34 PM
Posted: 4 years ago
At 12/21/2011 12:49:43 PM, jimtimmy wrote:
From my Blog:

1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.


So, the idea here is that interest rates have not skyrocketed, despite large budget deficits. There is no doubt that interest rates have no skyrocketed. However, the real question is whether or not Krugman and friends were unique in making this prediction.

The answer here is no. In fact, it was the Clinton administration that argued that deficits would increase intrest rates, and it was conservative, supply side economists who argued that they would not. In fact, Alan Reynolds, a supply side economist at the ultra-libertarian and anti Keynesian CATO institute, concluded that interest rates did not increase deficits.

So, this prediction is not at all unique to the Krugman and fellow Keynesian Economists.
Good so you agree that crowding out is a bullsit incorrect stupid thing that only idiots would thing occurs





2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.


The point here is that inflation has not yet exploded, despite a large increase in money creation. This is a bit dishonest on Krugman's part. Most of the economists who predicted massive inflation by 2011 were pessimistic Austrians.

The more mainstream economists who disagree with Krugman, like Scott Sumner, John Taylor, Tyler Cowen, Greg Mankiw, etc, certainly did not predict hyperinflation in 2011. Even the economists who predicted a massive increase in inflation said that it could take until 2012, to be fair.
Um half those economist you listed said that hyperinflation would occur.


And, to make matters even more interesting, Krugman said this in August about inflation:


"OK, someone is going to point out that inflation has run somewhat higher than I predicted; yes, it has. But I think the figure above shows that the outcome has nonetheless been a lot closer to what people like me said would happen than to what you would have expected from reading the WSJ."

So, Krugman is even conceding that inflation has been higher than he predicted, and his only counter to this is basically that, while that is true, inflation has been closer to his prediction than it has been to hyperinflation.

So, all in all, even Krugman admits the Keynesian prediction has been somewhat off here. Even if it wasn't, very few, if any, mainstream economists of any school were predicting massive inflation in 2011. So, again, this is hardly a big win for Keynes.
I love you excluded the part where Krugman says that higher expected inflation was actually driven by one time resource shocks and the fact that after those shocks occurred inflation dramatically fell.




3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place.


This is very questionable. Where exactly is he talking about?

The USA?

The deficit is still running at around 10% of GDP here, hardly "austerity".
Yep every study shows that the GOP austerity measures weekend GDP and employment growth
Also you are a retard. Having a 10% deficit doesn't mean deficits weren't cut.

Britain?

Scott Sumner said it best with regards to Britain:

"In fairness, the data in the article makes a mockery of all the claims that Britain is trying to engage in "expansionary austerity." Since when is a budget deficit of 8.4% of GDP three years after a recession "austerity?" Because the deficit used to be 11.2% of GDP a few years back? Yes, and the term "sobriety" describes a drunk who throws back 8 whiskey sours on Saturday night, because on Friday night he had 11 drinks. So I have no complaints about the fiscal "austerity," but I'm still trying to figure out what's wrong with Britain?"
Britain raised taxes and cut spending that is the definition of austerity. It would be nice if you had a clue about the things you were talking about but obviously you do not.
jimtimmy
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1/15/2012 2:29:48 PM
Posted: 4 years ago
At 1/15/2012 1:06:34 PM, Teafood wrote:
At 12/21/2011 12:49:43 PM, jimtimmy wrote:
From my Blog:

1. There has been no crowding out; interest rates outside the euro area have remained low despite massive government borrowing, which is what you'd expect in a liquidity trap.


So, the idea here is that interest rates have not skyrocketed, despite large budget deficits. There is no doubt that interest rates have no skyrocketed. However, the real question is whether or not Krugman and friends were unique in making this prediction.

The answer here is no. In fact, it was the Clinton administration that argued that deficits would increase intrest rates, and it was conservative, supply side economists who argued that they would not. In fact, Alan Reynolds, a supply side economist at the ultra-libertarian and anti Keynesian CATO institute, concluded that interest rates did not increase deficits.

So, this prediction is not at all unique to the Krugman and fellow Keynesian Economists.
Good so you agree that crowding out is a bullsit incorrect stupid thing that only idiots would thing occurs

No.






2. Inflation has been quiescent despite huge increases in the monetary base, again what you'd expect in a liquidity trap.


The point here is that inflation has not yet exploded, despite a large increase in money creation. This is a bit dishonest on Krugman's part. Most of the economists who predicted massive inflation by 2011 were pessimistic Austrians.

The more mainstream economists who disagree with Krugman, like Scott Sumner, John Taylor, Tyler Cowen, Greg Mankiw, etc, certainly did not predict hyperinflation in 2011. Even the economists who predicted a massive increase in inflation said that it could take until 2012, to be fair.
Um half those economist you listed said that hyperinflation would occur.

Give me one time that any of those economists predicted hyperinflation. One time.

They didn't.



And, to make matters even more interesting, Krugman said this in August about inflation:


"OK, someone is going to point out that inflation has run somewhat higher than I predicted; yes, it has. But I think the figure above shows that the outcome has nonetheless been a lot closer to what people like me said would happen than to what you would have expected from reading the WSJ."

So, Krugman is even conceding that inflation has been higher than he predicted, and his only counter to this is basically that, while that is true, inflation has been closer to his prediction than it has been to hyperinflation.

So, all in all, even Krugman admits the Keynesian prediction has been somewhat off here. Even if it wasn't, very few, if any, mainstream economists of any school were predicting massive inflation in 2011. So, again, this is hardly a big win for Keynes.
I love you excluded the part where Krugman says that higher expected inflation was actually driven by one time resource shocks and the fact that after those shocks occurred inflation dramatically fell.

He predicted really low inflation and it was higher than he predicted so he made a BS reason why he was wrong. Nothing special here.





3. Fiscal austerity has deepened the economic downturn everywhere it has been put in place.


This is very questionable. Where exactly is he talking about?

The USA?

The deficit is still running at around 10% of GDP here, hardly "austerity".
Yep every study shows that the GOP austerity measures weekend GDP and employment growth
Also you are a retard. Having a 10% deficit doesn't mean deficits weren't cut.

Ya, but you can't call a 10% deficit austerity, even if it was 20% the year before.


Britain?

Scott Sumner said it best with regards to Britain:

"In fairness, the data in the article makes a mockery of all the claims that Britain is trying to engage in "expansionary austerity." Since when is a budget deficit of 8.4% of GDP three years after a recession "austerity?" Because the deficit used to be 11.2% of GDP a few years back? Yes, and the term "sobriety" describes a drunk who throws back 8 whiskey sours on Saturday night, because on Friday night he had 11 drinks. So I have no complaints about the fiscal "austerity," but I'm still trying to figure out what's wrong with Britain?"
Britain raised taxes and cut spending that is the definition of austerity. It would be nice if you had a clue about the things you were talking about but obviously you do not.

So did Germany and.... wait. Their economy is doing great.

And, Britain is still running massive deficits.

So, I'm not the one here who doesn't know what he is talking about.
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Teafood
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1/15/2012 2:36:33 PM
Posted: 4 years ago
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.
At 12/21/2011 5:35:45 PM, jimtimmy wrote:


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.
I see so the fact that your predictions for massive inflation have failed to come true for the past 4 years is irrelevant on your thought process. SO basically you don't take into account reality when you think of policy positions
OberHerr
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1/15/2012 2:38:50 PM
Posted: 4 years ago
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.

At 12/21/2011 5:35:45 PM, jimtimmy wrote:


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.
I see so the fact that your predictions for massive inflation have failed to come true for the past 4 years is irrelevant on your thought process. SO basically you don't take into account reality when you think of policy positions
-~-~-~-~-~-~-~-OBERHERR'S SIGNATURE-~-~-~-~-~-~-~-

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"Cases are anti-town." - FourTrouble

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jimtimmy
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1/15/2012 2:46:07 PM
Posted: 4 years ago
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

Actually, it ended about 10 years after the New Deal. Studies show that the New Deal prolonged the depression.

At 12/21/2011 5:35:45 PM, jimtimmy wrote:


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.
I see so the fact that your predictions for massive inflation have failed to come true for the past 4 years is irrelevant on your thought process. SO basically you don't take into account reality when you think of policy positions

I didn't predict massive inflation. That post was from like 2 weeks ago. Lol, so, my prediction is for the next few years.

So, this is just stupud.
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Teafood
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1/15/2012 2:52:07 PM
Posted: 4 years ago
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…
OberHerr
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1/15/2012 2:54:19 PM
Posted: 4 years ago
At 1/15/2012 2:52:07 PM, Teafood wrote:
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…

I shall let jimmytimmy tear you arguments to pieces, and burn them in the flames of your own fail.
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Official Enforcer for the DDO Elite(if they existed).

"Cases are anti-town." - FourTrouble

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jimtimmy
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1/15/2012 2:57:37 PM
Posted: 4 years ago
At 1/15/2012 2:54:19 PM, OberHerr wrote:
At 1/15/2012 2:52:07 PM, Teafood wrote:
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…

I shall let jimmytimmy tear you arguments to pieces, and burn them in the flames of your own fail.

Thank you. I shall. lol
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Teafood
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1/15/2012 2:58:26 PM
Posted: 4 years ago
At 1/15/2012 2:46:07 PM, jimtimmy wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.


Actually, it ended about 10 years after the New Deal. Studies show that the New Deal prolonged the depression.
Economic growth in 1934 was 11%, 9% in 35, 13% in 36.
Economic growth was the highest its eve been during FDR's new deal.
Im sorry that facts have ot make you look stupid again
http://www.bea.gov...



At 12/21/2011 5:35:45 PM, jimtimmy wrote:


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.
I see so the fact that your predictions for massive inflation have failed to come true for the past 4 years is irrelevant on your thought process. SO basically you don't take into account reality when you think of policy positions



I didn't predict massive inflation. That post was from like 2 weeks ago. Lol, so, my prediction is for the next few years.

So, this is just stupud.
What is stupid is you sign that you are correct because some time in the next million years they might be massive inflation. People like you have been warning us about inflation for the past 4 years, and basically everything you said turned out wrong.
jimtimmy
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1/15/2012 3:03:24 PM
Posted: 4 years ago
At 1/15/2012 2:52:07 PM, Teafood wrote:
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…

I know what recession means. However, the New Deal extended the Great Depression because New Deal policies kept wages artificially high and created busines uncertainty.

Yes, there was a lot of GDP growth during the Depression. However, absent the New Deal policies, it would've been a lot stronger. Lee Ohanian showed that the New Deal prolonged the depression by 7 years. He actually answered the exact question you asked:

"Q. Isn't the fact that growth rates of real GDP or industrial production strong evidence
that the New Deal was successful?

A (Lee Ohanaian) . Not in my view. Using data on output growth, or the growth of other economic
indicators, as evidence on the speed of recovery, first requires a benchmark of how fast
recovery should have occurred. My research with Cole (2004) indicates that recovery
should have been much faster than observed. Moreover, it is striking that actual industrial
production grew more than 60 percent between July, 1932, and July 1933. This indicates
not only that the economy can generate remarkable growth rates coming out of a deep
depression, but that a recovery was starting in the summer of 1932, despite the fact that
deflation and banking crises were continuing. That recovery then accelerated
considerably in the spring of 1933, which has been interpreted as business was producing
in advance of the distortions that would be imposed by the NIRA. Industrial production"


Yes, there was a recovery. But, given the industrial realities and depth of the original decline, it shouldve been stronger.

And, there was no recovery in Hours worked, which the New Deal was supposed to recover.

Instead, the recovery took place in productivity per hour, where government policy matters A lot less
President of DDO
jimtimmy
Posts: 3,953
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1/15/2012 3:14:30 PM
Posted: 4 years ago
At 1/15/2012 2:58:26 PM, Teafood wrote:
At 1/15/2012 2:46:07 PM, jimtimmy wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.


Actually, it ended about 10 years after the New Deal. Studies show that the New Deal prolonged the depression.
Economic growth in 1934 was 11%, 9% in 35, 13% in 36.
Economic growth was the highest its eve been during FDR's new deal.
Im sorry that facts have ot make you look stupid again
http://www.bea.gov...

I responded to this in my last comment.





At 12/21/2011 5:35:45 PM, jimtimmy wrote:


I still think inflation will come, but it may not come in the near term.... If it doesn't, I'm not gonna abandon all my economic thinking, because the possibility is there.
I see so the fact that your predictions for massive inflation have failed to come true for the past 4 years is irrelevant on your thought process. SO basically you don't take into account reality when you think of policy positions



I didn't predict massive inflation. That post was from like 2 weeks ago. Lol, so, my prediction is for the next few years.

So, this is just stupud.
What is stupid is you sign that you are correct because some time in the next million years they might be massive inflation. People like you have been warning us about inflation for the past 4 years, and basically everything you said turned out wrong.

I didn't predict inflation until very reently and it still isn't certain.

ya, we have been wrong about everything.

We were wrong when we said the housing market would crash

We were wrong when we said European socialism would slow economic growth

We were wrong about communism failing

We were wrong about stagflation in the 1970s

We were wrong about the stimulus failing

Wait, we were right about all of those things.
President of DDO
Teafood
Posts: 29
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1/15/2012 3:33:12 PM
Posted: 4 years ago
At 1/15/2012 3:03:24 PM, jimtimmy wrote:
At 1/15/2012 2:52:07 PM, Teafood wrote:
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…


I know what recession means. However, the New Deal extended the Great Depression because New Deal policies kept wages artificially high and created busines uncertainty.

Yes, there was a lot of GDP growth during the Depression. However, absent the New Deal policies, it would've been a lot stronger. Lee Ohanian showed that the New Deal prolonged the depression by 7 years. He actually answered the exact question you asked:


"Q. Isn't the fact that growth rates of real GDP or industrial production strong evidence
that the New Deal was successful?

A (Lee Ohanaian) . Not in my view. Using data on output growth, or the growth of other economic
indicators, as evidence on the speed of recovery, first requires a benchmark of how fast
recovery should have occurred. My research with Cole (2004) indicates that recovery
should have been much faster than observed. Moreover, it is striking that actual industrial
production grew more than 60 percent between July, 1932, and July 1933. This indicates
not only that the economy can generate remarkable growth rates coming out of a deep
depression, but that a recovery was starting in the summer of 1932, despite the fact that
deflation and banking crises were continuing. That recovery then accelerated
considerably in the spring of 1933, which has been interpreted as business was producing
in advance of the distortions that would be imposed by the NIRA. Industrial production"


Yes, there was a recovery. But, given the industrial realities and depth of the original decline, it shouldve been stronger.

And, there was no recovery in Hours worked, which the New Deal was supposed to recover.

Instead, the recovery took place in productivity per hour, where government policy matters A lot less
http://www.bea.gov...
But please don't let reality interfere with your ignroance
jimtimmy
Posts: 3,953
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1/15/2012 3:42:19 PM
Posted: 4 years ago
At 1/15/2012 3:33:12 PM, Teafood wrote:
At 1/15/2012 3:03:24 PM, jimtimmy wrote:
At 1/15/2012 2:52:07 PM, Teafood wrote:
At 1/15/2012 2:38:50 PM, OberHerr wrote:
At 1/15/2012 2:36:33 PM, Teafood wrote:
At 12/21/2011 5:35:45 PM, jimtimmy wrote:
At 12/21/2011 5:04:14 PM, darkkermit wrote:
At 12/21/2011 4:27:14 PM, jimtimmy wrote:
Untrue... In America, the Keynesian Inspired New Deal prolonged the Depression by keeping wages and prices up and creating uncertainty
The great depression ended right after the New deal.

No, it ended after WWII.
From 1934-1939 The US experienced its highest growth in employment, and GDP ever.
A recession is were GDP and employment declines.. cant believe I have to explain to you want a recession means…


I know what recession means. However, the New Deal extended the Great Depression because New Deal policies kept wages artificially high and created busines uncertainty.

Yes, there was a lot of GDP growth during the Depression. However, absent the New Deal policies, it would've been a lot stronger. Lee Ohanian showed that the New Deal prolonged the depression by 7 years. He actually answered the exact question you asked:


"Q. Isn't the fact that growth rates of real GDP or industrial production strong evidence
that the New Deal was successful?

A (Lee Ohanaian) . Not in my view. Using data on output growth, or the growth of other economic
indicators, as evidence on the speed of recovery, first requires a benchmark of how fast
recovery should have occurred. My research with Cole (2004) indicates that recovery
should have been much faster than observed. Moreover, it is striking that actual industrial
production grew more than 60 percent between July, 1932, and July 1933. This indicates
not only that the economy can generate remarkable growth rates coming out of a deep
depression, but that a recovery was starting in the summer of 1932, despite the fact that
deflation and banking crises were continuing. That recovery then accelerated
considerably in the spring of 1933, which has been interpreted as business was producing
in advance of the distortions that would be imposed by the NIRA. Industrial production"


Yes, there was a recovery. But, given the industrial realities and depth of the original decline, it shouldve been stronger.

And, there was no recovery in Hours worked, which the New Deal was supposed to recover.

Instead, the recovery took place in productivity per hour, where government policy matters A lot less
http://www.bea.gov...
But please don't let reality interfere with your ignroance

You posted a link in response to my argument... wow.

And, you're the one who made the absurd comment that tax rates of 70% wou;dn't hurt growth.
President of DDO