Five macroeconomic myths?

Here is Ed Prescott’s list.  Here is the thumbnail version:

Myth No. 1: Monetary policy causes booms and busts
Myth No. 2: GDP growth was extraordinary in the 1990s
Myth No. 3: Americans don’t save
Myth No. 4: The U.S. government debt is big
Myth No. 5: Government debt is a burden on our grandchildren

Where to start?

In my view #1 is 53 percent true, not a myth, #2 is a debate over semantics, #3 is indeed a myth though we should save a bit more, interpreted literally #4 is myth but let’s not forget the real problem is forthcoming demographics combined with Medicare, and #5 is mostly a myth although the illusory "government debt is net wealth so let’s spend more than we ought to, thereby reducing the capital stock" effect is not zero.


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