Question for Recalculationists, Round 3
By Bryan Caplan
Unless I’ve unfairly overlooked someone, it looks like no recalculationist answered
my original question – namely, “By what percentage do real GDP and
employment fall if nominal GDP unexpectedly declines by 5%?” Arnold comes the closest.
In this example, I would have to say that a standard monetarist-Keynesian synthesis gives the correct answer.
Yes, the standard monetarist-Keynesian synthesis might have a standard range of responses. However, I’m asking recalculationists to answer my question with the specific number they believe to be true. Who will indulge me?