Tuesday, January 10, 2012

Can't let this one slip by...

I want to spend today writing (which is very hard for me... cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 blogosphere is quite a distraction), but I did want to address this positively goofy claim from Nick Rowe:

"OK, just one last slogan: macroeconomics is about PEOPLE, not GDP!"

It started over on Bob Murphy's blog and he was so tickled by it he proclaimed it on his own.

Bah! - meaningless propagandizing for sentimentalism! The statement on its face is completely absurd of course. If you had to boil macroeconomics down you could even say soemthing like "cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 study of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 determinants and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 nature of national income", or if you prefer a more cosmopolitan rendering, "of aggregate income" it's about nothing if it's not about GDP. You may not like it, but that's cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 reality of it.

Of course, if cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 only way to stick it to Krugman is to insist we're all talking about parts of aggregates and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir existence over several time periods, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n you might be inclined to say it's about people.

And cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re's a reason for this, too. It's a science of aggregate income (and ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r relevant aggregates, of course) - that's what it's "about". But why do we care about it? Two reasons at least, I propose: (1.) scientific curiosity (in which case, "people" be damned), and (2.) cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 recognition that both a stable GDP and a growing GDP are extremely important for human flourishing because most humans (in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 developed world) rely on income from employment for sustenance and employment depends crucially on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 production and sale of new goods and services. We also experience life in snippets of time, so it seems to me cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 state of things in a given period matters. So you can care about macroeconomics because you care about people, but let's not fool ourselves: it's about GDP.



*****

Don't worry people - while I believe every word I just wrote, this is in jest w.r.t. Nick. I am not outraged or anything.

2 comments:

  1. Daniel:

    (Your link doesn't seem to work, BTW).

    Yep. It was meant to be a bit goofy. A side-reference to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 "people not profits!" slogan.

    But cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re's a serious undertone too.

    It is paradoxical that GDP and consumption could be cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same in all future time periods, but cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 lifetime consumption of future people could be lower at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same time.

    Leaving cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 debt burden stuff aside, and leaving aside all cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 normal well-understood reasons why GDP is not a perfect measure of people's welfare. There's something else too:

    "If you had to boil macroeconomics down you could even say soemthing like "cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 study of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 determinants and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 nature of national income", or if you prefer a more cosmopolitan rendering, "of aggregate income" it's about nothing if it's not about GDP. You may not like it, but that's cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 reality of it."

    I used to believe that, at least roughly, until a month or so back. Now I think that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 GDP focus causes us to miss something important. It distorts our perspectives, so we miss seeing a bigger pattern of what is happening over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 business cycle. (Moreover, that focus on GDP can lead some of us into bizarre cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ories, like RBC, because we are ignoring half cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 data.)

    Specifically, GDP is about production, expenditure and income from newly-produced goods only. But if trade in old goods is cyclical too, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n that is important data we shouldn't ignore, and it matters for human welfare too.

    My two posts:

    http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/12/why-y.html

    http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/12/cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365-trade-cycle-vs-is.html

    I reckon I was onto something cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re.

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  2. Put it anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r way: cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re's more than one way to aggregate. We shouldn't let our cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ories of what is happening in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 world be determined by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 choices made by long-dead National Income Accountants.

    ReplyDelete

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