The single biggest issue is the difference between $500 billion stimulus spending by the gov't, versus $500 billion tax cuts. Both are "fiscal" policies, but the big tax cuts were far more simulative of supply increases, which reduce inflation thru more productive supply to more closely match the increased supply of money.
JFK, Reagan, and Trump all had big tax cuts, and all resulted in good supply increases.
Why isn't there more econ analysis comparing these two main fiscal stimulants - tax cuts vs spending?
(My answer - because gov't rewards economists who support spending and punishes/ ignores those who support tax cuts.)
*** Hope it was a good discussion - I never got confirmation of my registration in the last 2 hours before ***
My interest in (macro)economics started when I was 10, in 1951. Thanks to Perón I was introduced into what a fiscal-financial- monetary-exchange rate crisis was about. By 1961, I had learned all what the top (macro)economists had to say about that sort of crisis, and I had lived through the first decade of Argentina's decline (the first IMF agreement was signed in December 1958, and in 1959 inflation was as high as 50% per year). Like Alan Blinder, I could say a lot about the last 60 years in the macro-history of humankind. Unlike Alan, I lived and worked in several countries. Alan claims that his book represents a life's journey through macroeconomics, but his journey has always limited to the U.S. He missed what happened outside the U.S. and how it conditioned the U.S. federal government's macroeconomic policies. As a work of history, his book is too limited.
As a work of theory, his book is irrelevant. Even if we ignore most of what was advanced as new ideas in the last 60 years (there are good arguments to ignore them), he should have attempted to rely on the simple framework used in the early 1960s but expanded to take into account at least some basic insights about the changing nature of government expenditure (from production to redistribution) and the changing sources of financing it. I don't think Alan can give a clear definition of "fiscal" and "monetary" policy (I'd say policies and include more than two). Theory is needed to explain Alan's journey. Without it, we can thank him for his reporting but at the end we will still be asking why 60-years later there is so much uncertainty about U.S. government policies (about what the current or a new administration would do and specially about their consequences).
Arnold, have you considered to compare the legacy of Ben Bernanke and Tony Fauci?
Conceptually, isn't fiscal policy just one kind of demand shock? Wasn't a lot of COVID a demand shock, not just people getting sick and not being able to go to work or being "locked down" from work?
Is there a recording? I teach during this time and can’t make these.
The single biggest issue is the difference between $500 billion stimulus spending by the gov't, versus $500 billion tax cuts. Both are "fiscal" policies, but the big tax cuts were far more simulative of supply increases, which reduce inflation thru more productive supply to more closely match the increased supply of money.
JFK, Reagan, and Trump all had big tax cuts, and all resulted in good supply increases.
Why isn't there more econ analysis comparing these two main fiscal stimulants - tax cuts vs spending?
(My answer - because gov't rewards economists who support spending and punishes/ ignores those who support tax cuts.)
*** Hope it was a good discussion - I never got confirmation of my registration in the last 2 hours before ***
My interest in (macro)economics started when I was 10, in 1951. Thanks to Perón I was introduced into what a fiscal-financial- monetary-exchange rate crisis was about. By 1961, I had learned all what the top (macro)economists had to say about that sort of crisis, and I had lived through the first decade of Argentina's decline (the first IMF agreement was signed in December 1958, and in 1959 inflation was as high as 50% per year). Like Alan Blinder, I could say a lot about the last 60 years in the macro-history of humankind. Unlike Alan, I lived and worked in several countries. Alan claims that his book represents a life's journey through macroeconomics, but his journey has always limited to the U.S. He missed what happened outside the U.S. and how it conditioned the U.S. federal government's macroeconomic policies. As a work of history, his book is too limited.
As a work of theory, his book is irrelevant. Even if we ignore most of what was advanced as new ideas in the last 60 years (there are good arguments to ignore them), he should have attempted to rely on the simple framework used in the early 1960s but expanded to take into account at least some basic insights about the changing nature of government expenditure (from production to redistribution) and the changing sources of financing it. I don't think Alan can give a clear definition of "fiscal" and "monetary" policy (I'd say policies and include more than two). Theory is needed to explain Alan's journey. Without it, we can thank him for his reporting but at the end we will still be asking why 60-years later there is so much uncertainty about U.S. government policies (about what the current or a new administration would do and specially about their consequences).
Arnold, have you considered to compare the legacy of Ben Bernanke and Tony Fauci?
Conceptually, isn't fiscal policy just one kind of demand shock? Wasn't a lot of COVID a demand shock, not just people getting sick and not being able to go to work or being "locked down" from work?