Sumner on the Big Macro Debate
By David Henderson
Lots of brilliant people talking past each other. Lacking a common language for communication. Welcome to elite macroeconomics, circa 2011.
The right doesn’t think we need more NGDP [Nominal Gross Domestic Product] and the left doesn’t understand that the Fed is our only realistic hope for more NGDP. Welcome to elite macroeconomics, circa 2011.
If I was going to assign blame I’d single out Krugman/DeLong for rudeness and Fama/Cochrane for poor communication skills. But of course I have no business attacking such distinguished economists.
This is from Scott Sumner’s latest post. I think this is one of the best posts Scott Sumner has done this year. Given the average quality of his posts, that’s a high bar. He explains the debate between Fama/Cochrane and Krugman/DeLong and tells where he stands on the debate.
In the last two years, no economist has affected my views of macro/monetary policy more than Scott Sumner. Unlike Scott, I would like to abolish the Federal Reserve Board. But if it’s going to exist, I agree with Scott that it should be increasing NGDP as a way out of the rigid wage problem.
Scott has distinguished himself, which means he is a “distinguished economist.” So, yes, it absolutely is proper for him to “attack such distinguished economists.” Although I wouldn’t call his post an attack. It’s simply a clarification and a holding of various other economists to account.