The View From 1776

Common Sense And Experience vs. Robotic Computer Models

An interview, on the Barron’s website, with Professor John Taylor.

Posted by .(JavaScript must be enabled to view this email address) on 04/21 at 06:18 PM
  1. Taylor's claims are opinion not supported by evidence. When he says the stimulus had "little effect," the logical question is "compared to what?" The evidence shows that the economy was in a steep decline toward a disastrous depression. The stimulus put the brakes on that and turned all indicators around. If you look at all the curves - unemployment, jobs, stock market - they were all headed south at the end of the Bush term and had an inflection point after the stimulus took hold. They have all been generally upward ever since.

    Yes, the stimulus did not turn the failing economy into a pot boiler overnight, but it stopped the impending disaster and the resulting recovery is undeniable, albeit slower than desired.

    Recall that the stimulus was also not what many Keynesians wanted - too small and too much pork dictated by Congressional power centers.
    Posted by .(JavaScript must be enabled to view this email address)  on  04/25  at  09:08 AM
  2. J. Jay,

    So Jaybird, now you are expert in economics as can disqualify and dismiss Dr. Taylor (you who are always lecturing we should curtsy to experts with PhD
    Posted by .(JavaScript must be enabled to view this email address)  on  04/28  at  04:49 PM
  3. Bob,

    I think you overstate my criticism of Economist Taylor, whose credentials I did not question. I merely attempted to point out that his assertion that the stimulus did no good is not verifiable without a control group. In other words, we do not know what would have happened had there been no stimulus. This is of course not his fault because in the dismal science you have few opportunities to run controlled tests of policy.

    I struggle to comprehend why you do not see any improvement in the economy. Luminaries, including one as illustrates as Mitt Romney have said that the economy is improving. On a January 2012 Laura Ingram show, when asked about the economy under Obama, he famously answered "Of, course the economy is getting better!" When then asked by Ingram if it is a hard to argue that even though the economy is improving, we should vote for Romney, Romney said, "Do you have a better argument, Laura?!"

    So, yes, John Taylor is an advocate of the "New Keynesian" model for the multiplier effect, and he indeed does opine that the stimulus did not accomplish much. But that does not make his opinion rise above that of all other economists.

    (At least he recognizes the reality of the multiplier effect - even though he favors a model that shows a lower response level.)
    Posted by .(JavaScript must be enabled to view this email address)  on  04/29  at  10:01 PM
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