Paper of the week (POW) this week definitely goes to N. Gregory Mankiw for firing totally reasonable and called for shots at "modern monetary theory".
The paper can be found at this link and is also reproduced below.
"In the end, my study of MMT led me to find some common ground with its proponents without drawing all the radical inferences they do. I agree that the government can always print money to pay its bills. But that fact does not free the government from its intertemporal budget constraint. I agree that the economy normally operates with excess capacity, in the sense that the economy’s output often falls short of its optimum. But that conclusion does not mean that policymakers only rarely need to worry about inflationary pressures. I agree that, in a world of pervasive market power, government price setting might improve private price setting as a matter of economic theory. But that deduction does not imply that actual governments in actual economies can increase welfare by inserting themselves extensively in the price-setting process. "
A sad day for the profession, former Chair of the Fed Paul Volcker passed on to the central bank beyond this plane of existence.
Among the great features of Paul Volcker to highlight are the fact that he is by all means an economist without having a Ph.D., the "Volcker Rule", his penchant for austerity, and the various cigar photos, my favorite of which is...
If you want a quick catch up on Volcker's economic sense, I high recommend the following book, which New York residents can borrow free via the New York Public Library (click for related post).
So today marks the finale of the Fall 2019 semester at Farmingdale State College.
I was touched when a group of students in my applied game theory course asked for a picture after the final lecture!
I have to admit I am really going to miss the class. Elective scheduling is somewhat a black box here, so I am sad to say I am unsure when it will be offered next.
Thanks for a fun semester !
This blog is a therapeutic outlet for me to write about life on the tenure track in economics.