The Evolution of Macroeconomics, Part Two
We have accumulated more than six decades of macroeconomic experience since the end of World War II, yet neither stubborn Keynesians nor stubborn monetarists have encountered any data that would make them change their minds. Instead, since 2008, the Keynesians have effectively “taken back” all of the concessions that they made in the 1970s and 1980s.
Mark Thoma and I are supposed to be on a panel in a couple of weeks, but talking about something else. Still, when we get together outside the panel I hope I can coax a reaction to these essays out of him.
[UPDATE: Bill Woolsey’s comment below makes me think of the straightforward argument for market monetarism:
1. What’s the worst thing that would happen if the Fed tried to level-target nominal GDP at a 5 percent annual growth rate relative to when we were at full employment?
2. What’s the worst thing that would happen if it didn’t?]