Tuesday, December 15, 2009

Is Nate Silver cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 World's 22nd Best Economist?

Nate Silver likes to refer to Greg Mankiw as "cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 world's 23rd best economist." He also seems to relish every opportunity to take him on.

About six months ago, Mankiw made a somewhat disparaging comment about Sonia Sotomayor on his blog:
I once wrote a short paper... based on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 premise that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re are two types of people: Some save and intertemporally optimize cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir consumption plans, while ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365rs live paycheck to paycheck, spending cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir entire income as soon as it's received. Sometimes readers of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 paper think of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 two groups as rich and poor, but that interpretation is wrong. Some people with low incomes manage to scrimp and save (I always think of my grandmocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r), and some people with high incomes spend most everything cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y earn.

Apparently, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 new Supreme Court nominee Sonia Sotomayor is an example of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latter...
My grandmocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r would have been shocked and appalled to see someone who makes so much save so little.
Here Mankiw is assigning Sotomayor to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 group of individuals who do not "intertemporally optimize" based simply on evidence that her accumulated savings are small relative to her income. Using impeccable economic reasoning, Nate Silver countered as follows:
What are a person's incentives to save, racá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r than spend, money? The four basic ones are usually cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se:
  1. To protect against downside in one's income, particularly cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 risk of being fired.
  2. To save for retirement.
  3. To save for one's family and children.
  4. To save for an expensive purchase, such as a home or a nice car. 
Nos. 1-3 don't really apply to Sotomayor. With cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 possible exception of being a tenured professor at Harvard, few positions offer more job and income security than that of a justice on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Federal Circuit Court; Sotomayor would have to be impeached by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 House and found guilty by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Senate to lose her job, something which has happened only a handful of times in American History. Sotomayor's federal pension is undoubtedly very generous, rendering #2 somewhat moot, particularly as she could also stand to make a significant "post-retirement" income in private practice or on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 lecture circuit. And she does not have a children or a husband to support. It would be quite irrational if she had half a million dollars collecting dust and 0.01% interest in her Chase checking account.
Perhaps Mankiw's grandmocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r would find her more virtuous if she were saving up for a Lexus or a summer home in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Hamptons, but that doesn't seem to be her cup of tea. Her one real indulgence is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 apartment she keeps in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 West Village. Although virtually anywhere that would be a reasonable commute from her courtroom in Lower Manhattan would be relatively expensive, she could save a bit by living in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Financial District or perhaps in Brooklyn. But Mankiw, who lives in a zip code where cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 median price of a house is 1.65 million dollars, should not exactly be throwing stones from his undoubtedly very charming, New England Colonial home.
In ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r words, given her circumstances and preferences, it appears that Sonia Sotomayor is intertemporally optimizing perfectly well.

That exchange was back in May, and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 matter rested until Mankiw published a piece in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 New York Times this week arguing for a change of course in fiscal policy:
Congress passed a sizable fiscal stimulus. Yet things turned out worse than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 White House expected. The unemployment rate is now 10 percent — a full percentage point above what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 administration economists said would occur without any stimulus.

To be sure, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re are some positive signs, like reduced credit spreads, gross domestic product growth and diminishing job losses. But cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 recovery is not yet as robust as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 president and his economic team had originally hoped.

So what to do now? The administration seems most intent on staying cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 course, although in a speech Tuesday, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 president showed interest in upping cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 dosage. The better path, however, might be to rethink cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 remedy.

When devising its fiscal package, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Obama administration relied on conventional economic models based in part on ideas of John Maynard Keynes. Keynesian cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ory says that government spending is more potent than tax policy for jump-starting a stalled economy.

But various recent studies suggest that conventional wisdom is backward...
These studies point toward tax policy as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 best fiscal tool to combat recession, particularly tax changes that influence incentives to invest, like an investment tax credit. Sending out lump-sum rebates, as was done in spring 2008, makes less sense, as it provides little impetus for spending or production.
This was too much for Nate to resist. In his response he notes first that tax cuts were indeed a large component of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 original stimulus package.
First, let's take a look at what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus package was actually designed to consist of... Some $288 billion -- 37 percent -- consisted unambiguously of tax cuts that were labeled as such. Meanwhile, $274 billion -- 35 percent -- consisted of traditional, Keynesian-type investments in infrastructure and related areas. These types of spending are easy to characterize...
 

Indeed, it's probably fair to think of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus as consisting of about half tax cuts. About 37 percent of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus consisted of tax cuts which were labeled as such. But also, some fraction of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 10 percent labeled as transfer payments functioned like tax cuts, and some fraction of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 18 percent allocated to state and local governments had cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 effect of offsetting tax increases (or perhaps financing a tax cut proper in a few cases).
Does this mean that tax cuts are ineffective in stimulating production? Not really:
In ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r words, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus -- in terms of its potential impact on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economy thus far -- looks at least as much like Mankiw's alternative as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 "conventional economic models" that he trashes.
All of which might indict Mankiw's cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365sis -- except that he also may be wrong about his ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r conclusion: that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus is not working. Mankiw cites studies describing cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 impact of various types of stimulus on GDP -- not unemployment -- and as we pointed out yesterday by GDP standards cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus has done quite well, with 3Q growth coming in at 2.9 percent versus a consensus forecast of 0.7 percent and 4Q GDP poised to print at about 4.0 percent versus a forecast of 1.9 percent...
So, to summarize: Mankiw is wrong that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus consists mostly of Keynesian-type investments. So far, it has been closer to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 tax cut end of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 spectrum. But he's also wrong that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus is not working. By cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 benchmark that he implicitly endorses -- GDP -- it's done very well. Mankiw is so wrong, in ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r words, that he may actually be right: cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus looks a lot like one he might have designed, and it's helping cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economy.
As Nate concedes, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 substance of Mankiw's argument (that tax cuts are more effective than spending increases in stimulating production) may well be correct. The empirical studies cited by Mankiw do seem to support his position, and do indeed run counter to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 conventional Keynesian view. This is an important debate to have, both for immediate policy purposes and for our cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365oretical understanding of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 manner in which fiscal policy operates. But cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re seems to be no reason to make it a partisan exercise.

What can one learn from all this? First, that couching an economic argument in overtly moralistic or political terms can considerably diminish its impact. And second, Nate Silver may well be cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 22nd best economist in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 world.

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Update (12/16): There's yet anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r noteworthy exchange between our two protagonists, dating all cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 way back to January 2009. It started with an article by Mankiw arguing (just as he did in his more recent piece) that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 government spending multiplier was much smaller than conventional wisdom would have us believe, while cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 tax multiplier was significantly larger. Silver responded by claiming that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 empirical findings on which Mankiw's argument was based could not be generalized to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current economic environment because cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y referred to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 effects of exogenous changes in  taxes and expenditure. Mankiw replied that without focusing on exogenous changes one could not possibly hope to identify causal effects of any kind. In this case both were making valid points: Mankiw about identifiability and Silver about external validity, as Andrew Gelman helpfully pointed out.

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Update (12/18):  Mankiw makes a much more effective (and considerably less partisan) case for an investment tax credit on his blog.

9 comments:

  1. I advise that you be very careful of deceptive tricks with Greg Mankiw (like, for example, he did here, comparing a number in one study not to a number in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same study, but in a different study), and look at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 details.

    Please consider this from Princeton's Ewe Reinhart on Mankiw on this subject (at: http://economix.blogs.nytimes.com/2009/01/16/can-economists-be-trusted/ )

    Writing in The New York Times, for example, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Harvard professor N. Gregory Mankiw, former chief of President Bush’s Council of Economic Advisers, makes a case for stimulating cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economy through tax cuts racá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r than added government spending.

    First, he suggests that government usually spends money on things people do not want or need – like bridges to nowhere, or digging ditches and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n filling cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m in again. To buttress his case furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r, he cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n cites an empirical study by Valerie A. Ramey, according to which cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 $1 of added government spending will ultimately increase gross domestic product by only $1.40, while according to anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r recent study by Christina and David Romer, $1 of tax cuts over time increases G.D.P. by $3.

    Noneconomists may ask, of course, exactly how a $1 cut in taxes would translate itself into a $3 increase in G.D.P. at a time when traumatized households, whose wealth has been eroded, might use any new tax savings merely to pay down debt or rebuild cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir wealth through added savings, racá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r than spend it, and when businesses unable to sell cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir output even from existing capacity might hesitate to invest such tax savings in more capacity.

    But never mind this fine point.

    More interesting is that Christina Romer is to be cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 head of President-elect Barack Obama’s Council of Economic Advisers. In that capacity, last Saturday she released an analysis of fiscal stimulus alternatives, with a co-author, Jared Bernstein. Curiously — or perhaps not — for that analysis, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 two authors assume a much larger four-year multiplier effect for added government spending (1.55) than for tax cuts (0.98), although cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y do confess to a high degree of uncertainty on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 actual sizes of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se multipliers.

    So cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re you have cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 flexibility, shall we say, that economists enjoy when cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y apply cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir professional skills to affairs of state in what may seem, to outsiders, like purely scientific analyses.

    ReplyDelete
  2. Also, Menzie Chinn makes a crucial point, "It matters what assumptions are made" (at: http://www.econbrowser.com/archives/2009/03/cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365_great_multi.html ). This is especially true with freshwater research where cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y can make some amazing whoppers and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n interpret cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 conclusions very literally, or completely literally even.

    ReplyDelete
  3. If tax cuts are so effective, why were cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Bush tax cuts followed a mere five years later by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 largest economic collapse in 70 years? Why were cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 enormous tax cuts of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 early to mid-20's followed by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Great Depression, again starting a mere five years later? And let's not forget cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 only significant tax increase of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 last 30 years was subsequently followed by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economic boom of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 late 90's and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 only balanced federal budget in my lifetime.

    I realize economies are complicated and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re's far, far more going on than simply tax rates. But when I look at 100 years of data, I see that major increases in X don't seem to have any significant negative affect on Y, and in fact have been followed by greatly improving Y in many cases. Major decreases in X have preceded cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 two largest drops in Y in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 entire data set, and overall seem no more likely to increase Y than decrease it.

    How does one conclude from such information that decreasing X is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 best way to increase Y???

    ReplyDelete
  4. Richard, I don't believe for a moment that anyone here is being deliberately deceptive. Mankiw clearly believes that (suitably targeted) tax cuts are a more effective fiscal policy instrument than increases in government expenditure, and that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 empirical evidence on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 matter supports his position. But his attempt to distance himself from administration policies and to cast cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se policies in a poor light made his own argument less effective, and left him vulnerable to Nate's critique. That's all I was trying to say.

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  5. Anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r key thing to consider in any analysis of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 value of a stimulus measure is what cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 actual increased(short-run, cyclical)GDP goods will be.

    If a tax cut will increase (short-run, cyclical) GDP by $1 trillion in highly positional/context/prestige consumption goods, like yachts, $5,000 watches, etc., cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n this will do little to increase total societal utility, as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se things have enormous positional/context/prestige externalities. They're very zero sum utility game, and provide relatively little additional non-positional, or intrinsic, utility. Moreover, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y are of little productive investment value.

    On cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r hand, if a fiscal stimulus creates cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same $1 trillion in (short-run, cyclical) GDP, but it is in things like alternative energy, basic medical research to cure cancer, education, smart infrastructure, and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 like, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se essentially non-positional/context/prestige goods would create far more total societal utility, and be far more productive investments, and thus would increase GDP far more over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 long run.

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  6. Mankiw has a history of being intellectually dishonest when he puts his pundit hat on. Fortunately I had already read all four of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 papers he referred to that purportedly show tax cuts are supperior as fiscal stimulus to spending. They are popular fodder for those who suffer from tax cuts can cure any economic problem dementia. Two of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 papers Mankiw (purposefully?) missinterprets and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r two suffer from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365oretical and empirical defects as I will now note:

    1) The Romers' paper did not suggest that tax cuts were uniquely effective. They used special techniques to classify tax changes based on intent that have yet to be applied to spending changes. Only noncountercyclical tax changes that decreased a fiscal balance were found to be statistically significant in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir effect on GDP growth. Not only is this not a supply side result cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 paper suggested that tax cuts to fight recessions had no statistically significant effect on GDP. David Romer described cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results as "Hyper-Keynesian."

    2) Andrew Mountford and Harald Uhlig's paper was based on a cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365oretical Neo-Classical model that assumed Ricardian Equivalence. The assumption of Ricardian Equivalence is virtually guaranteed to achieve cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y reported. Ricardian Equivalence is also not supported by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 vast majority of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 empirical economic research literature.

    3) Alberto Alesina and Silvia Ardagna's paper was a cherry picked study of 91 fiscal stimuli. Only two of those incidents included a financial crisis/liquidity trap incident (Sweden early 1990s and Japan late 1990s) under which monetary policy has become less effective and spending based fiscal stimuli are empirically known to be highly effective.

    4) Olivier Blanchard and Roberto Perotti's study did not find that tax cuts were more effective than spending increases in increasing output. As cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y said "cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results consistently show positive government spending shocks as having a positive effect on output."

    In my experience it's best not to take Mankiw's punditry word for anything.

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  7. We also have an interesting laboratory experiment in progress on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 relative effectiveness of tax cuta and spending as fiscal stimuli. The CBO has examined both cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 2008 fiscal stimulus and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 current one (ARRA).

    They concluded that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 $150 billion 2008 stimulus lifted consumer spending by 2.3% at an annual rate in Q2 2008 and thus GDP by 1.6% at an annual rate. The overall effect was to lift GDP by about 0.4% in each cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 second and third quarters of 2008, or a total of $30 billion. Thus we can estimate that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fiscal multiplier was only about 0.2.

    https://www.cbo.gov/ftpdocs
    /96xx/doc9617
    /06-10-2008Stimulus.pdf

    The CBO just released its estimates on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 effect of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 2009 stimulus (ARRA) on third quarter GDP. The midpoint of its estimate range is that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stimulus added 2.2% to quarterly GDP or about $80 billion:

    https://www.cbo.gov/ftpdocs
    /106xx/doc10682/11-30-ARRA.pdf

    ARRA is being spent (direct spending + tax cuts) at a fairly steady clip of $100 billion a quarter from Q2 2009 through Q3 2010. Thereafter it will tail off rapidly. Thus we can estimate that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fiscal multiplier for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 third quarter alone was about 0.8.

    Its impact however will not peak out until Q3 2010 according to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 CEA when it will be roughly 250% of what it was in Q3 2009. The most recent CBO analysis thus implies it should add 5.5% to GDP or about $200 billion on a quarterly basis by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n, producing a fiscal multiplier of about 2.0 for that quarter by itself. I estimate at this pace that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fiscal multiplier averaged throughout cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 three years or so of ARRA should in fact turn out to be about 2.

    So, why is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fiscal multiplier for ARRA turning out to be so much higher than for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 2008 stimulus? Well, for one thing ARRA is being implemented during a financial crisis/liquidity trap which empirical studies have shown results in a higher fiscal multiplier. But more importantly cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 2008 fiscal stimulus consisted entirely of a tax cut.

    The IMF has a good summary of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economic research literature on fiscal stimuli (about 200 papers are featured):

    http://www.imf.org/external/pubs/ft/wp/2002/wp02208.pdf

    Here is what it says about cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 empirical research in its conclusion:

    "Estimates of fiscal multipliers are overwhelmingly positive but small. Short term multipliers average around half for taxes and one for spending, with only modest variation across countries and models (albeit some outliers)."

    In short, on average, spending provides double cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 fiscal stimulus of tax cuts.

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  8. Mark, I appreciate your comments on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 content of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se papers. But as I said earlier, I am not willing to question cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 integrity of Mankiw, Silver, or anyone else for that matter. And (until I've had a chance to look closely at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 issue myself) I will remain open minded about cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 effects of tax cuts versus government spending.

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