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, 4 tweets, 2 min read
No matter how you measure it, inflation no longer responds to unemployment or the output gap the way it used to. scholar.harvard.edu/files/stock/fi…
The Keynesian in me looks at this and says: There is more space for boosting demand than you would think based on models from earlier decades. Sounds like an argument for a Green New Deal!
The Marxist in me says: But the authorities still regard low unemployment as a problem. Clearly they are worried abut something other than inflation. (The Marxist writes for Jacobin: jacobinmag.com/2016/01/federa…)
The critic of economics methodology says: Why exactly should we apply a statistical filter to unempoyment that impies that the US was above full employment in 2012?
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JW Mason
@JWMason1
I wrote a blogpost about the CBO's latest downwward revision of its long-run forecast of interest rates on federal debt. It's a big downward revision!

On the Roosevelt Institute blog: rooseveltinstitute.org/behind-the-num…

On my personal blog: jwmason.org/slackwire/the-…
I'm genuinely curious what deficit scolds, and/or, less pejoratively, people who think the fedeal debt is a serious constraint on public spending, think about this. The CBO is normally sacrosanct. Will the argument be that in this case they got it wrong?
Under the 2014 assumptions, the current primary deficit implies that the debt-GDP ratio reaches 150 percent in 2040 and goes on rising to infinity thereafter. You still see these numbers cited by people like Bill Gale or Stuart Butler.
Read 10 tweets
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JW Mason
@JWMason1
Here's the huse budget committee document prepared for today's hearing on fiscal policy. If this is Congressional Dems' thinking on the budget these days, I'd say that's progress. budget.house.gov/sites/democrat…
The starting point is an umambivalent argument in favor of fiscal stmulus in downturns.
I appreciate the frank acknowledgement that the ARRA in 2009 was too small, and that unemployment remained higher, for longer, than it would have if the stimulus had been larger. It's good that "the stimulus was too small" is a mistake DC Dems are now copping to.
Read 5 tweets
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JW Mason
@JWMason1
People often say that an inverted yield curve (short rates above long ones) predicts recessions because 1) long rates reflect investor belefs about future short rates and 2) central banks lower short rates in recessions.
The logic is fine as far as it goes but there's an additional assumption which often goes unstated: that central banks are **ineffective** at stabilizing demand.
As any student of Milton Friedman could tell you, if changes in the policy interest rate are in general sufficient to offset shfits in demand, with recessions (or inflationary booms) due only to central bank error, then interest rates and the output gap should be uncorrelated.
Read 14 tweets

Related threads

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Jeffrey Sachs
@JeffreyASachs
If you're like me, you'd rather walk into traffic than read another centrist/NeverTrump column on why Democrats need to jettison racial liberalism and ID Politics in order to win in 2020.

Well, good news! There's strong evidence those columns are wrong. Not decisive, but strong.
First of all, identity politics (or whatever you want to call it) can be a winning strategy for Democrats. See for instance Stout (2015), which examines the impact of racial appeals by black candidates on voter turnout and partisan support.

amazon.ca/Bringing-Race-…
When black candidates make positive racial appeals (e.g. "Black unemployment is a top priority for me", "Affirmative action helps to redress discrimination"), black and Latino support increases WITH NO CORRESPONDING DROP in white support.

(More on negative appeals in a moment)
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Alice Evans
@_alice_evans
What 10 topics should every International Development student learn?

I'm keen to redesign my course. I have 10 weeks.

What should I include?

I'd love it if academics would each suggest 10 topics they think are key priorities for a core course. What's MOST important? GO!
i really like @ayanhme's approach:

taking two weeks to consider different explanations of divergence.

really important question, & good to spend time exploring alternative hypotheses.
.@guygrossman teaches on the political economy of development
dropbox.com/s/zc5m86s9i7p6… (very awesome topics. my course differs as it has more on collective organising, resistance, & contentious politics).
Read 13 tweets
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Mike Makowsky
@mikemakowsky
New (accepted!) paper and thread: “To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement” by myself, Thomas Stratmann, and @ATabarrok, forthcoming in the Journal of Legal Studies 1/17
papers.ssrn.com/sol3/papers.cf…
Punchline: when local governments are running budget deficits, black and Hispanic arrest rates increase, while white arrests remain (mostly) unchanged, *but only if* local police are legally able to retain forfeiture revenues in their budget 2/17
To better understand our results, I’d like to walk through two important *correlations* first, and then our discuss our strategy for identifying a *causal* relationship between fiscal incentives and arrests 3/17
Read 19 tweets
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Matthew🏳️‍🌈D🏳️‍🌈LaPlante
@mdlaplante
After being convicted by a federal jury of a hate crime against a black neighbor, this man faced up to 10 years in prison. Prosecutors recommended a sentence of four years. But he’ll be out of jail in… wait for it... Mugshot of Mark Olic Porter, a middle-aged man in red jail clothing. He has gray hair.
THREE WEEKS!
Mark Olic Porter called a seven-year-old black boy a “n—” (for riding a scooter in a public place.) Then he assaulted the boy’s father with a stun device. Then he assaulted the police who showed up in response.
Read 19 tweets

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