by Tyler Cowen
on January 26, 2009 at 8:54 pm
1. Bottom line thinking on the stimulus, pro and con.
2. Which personality types let you cut in line?
3. Cultural treasures of New Jersey?
4. Markets in everything: clothes made out of your pet's fur.
Well heck, what with our, ahem, substantial cat population, we could make enough sweaters for all our Christmas gifts.
Cultural treasures of NJ? I think we could add some new ones to that list… Davey’s Locker, Finnegan’s, Ronnie’s bagels, the Porterhouse
Isn’t obvious that “self-monitors” are more concerned with rules of proper behavior in general and apply them to others as well as themselves? I was surprised the researchers expected the opposite result.
The cat thing? Well it’s just creepy!
It is telling that the first comment Arnold makes about the Murphy framework is this:
“First, it assumes that the four parameters are constants.”
His comment should have been that the four parameters are just made up. DeLong and Murphy just assume totally different values for these numbers. This basically means that these parameters are extremely uncertain; you can get any conclusion you want out of the framework by just picking the numbers you like. It’s laughable that neither Murphy nor DeLong explicitly recognize this by setting realistic confidence interval on the parameters and thereby derive a confidence interval for the net effect of the stimulus.
“Putting it all together, DeLong says that the Keynes effect means that $100 of government spending gives us $150 of output from previously unemployed resources. We subtract only one-fifth of this ($30) for the Housework effect and nothing for the Galbraith effect, for a net of $120. Subtract from this a Feldstein effect of $33, so the net gain is $87.”
Am I missing something, or is DeLong saying (or not refuting) that we’ll get $87 worth of value for the $100 we spend? Seriously, I must be missing something. I don’t think he’d advocate trading $100 for $87.
They forgot Debbie Harry and all of The Misfits on that Jersey list….
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