The new jobs report

All good news, 243k up but lots more information in the numbers, try @JustinWolfers or @BetseyStevenson for details and interpretation.  The “big loser” here?: Old Keynesianism.  You really can get a recovery when the real shocks are moderately positive.  You will note, as we have been told many many times by many many sources, fiscal and monetary policy have not been extremely pro-active in recent times; in fact the stimulus has been trickling to a close.  The big winners, apart from the American public?: real business cycle theory.  It is part of any cyclical explanation, whether one likes it or not.

Another big loser is those liquidity trap theories which tell us that positive real shocks are bad for the economy because the AD curve has a perverse slope, etc., and that negative shocks might help spur recovery.  That theory is looking very weak, again.  I consider it the weakest economic theory that has any currency in the serious economics blogosphere.


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