Monday 28 February 2011

Surprising and unsurprising

John B. Taylor has long been associated with monetary policy after his contributions to the field, most obviously encapsulated in the Taylor Rule.  However, it would sound like he's heading in the direction that Paul Krugman took of getting so mired in politics that one seriously has to call into question his academic integrity.  In this defence of a package to cut government spending, he says on the idea that cutting government spending might cause the economy to contract: "Nothing could be more contrary to basic economics, experience and facts"

Really?  The basic economics that people tend to make use of when making suggestions that cutting government spending might just have a negative effect on the economy is national accounting identities which say that part of aggregate spending is government spending.  The experience?  Well, most economies that have tried it when they haven't had some positive external shock to help them (so we're talking currently of the UK and Ireland at the minimum, and many more could be found I'm sure).  Facts?  Well we've just noted a basic economic model, and given a few experiences to counter Taylor.

But of course, according to Taylor, we're just wrong, plain wrong.  That's because he's basing what he says on some model that assumes immediate crowding in when governments reduce spending (in the absence of any evidence for such an effect - but Taylor says these models are more modern so that means they must be right!).  Well how about that.  A model which assumes that a fiscal contraction will be expansionary finds just that.  Mindblowing.  And to think people get disillusioned with economists.  So in the US, this bill will pass, and sure enough growth won't follow, just like we're seeing in the UK currently.  No wonder people like Krugman despair so much...

 

Tuesday 22 February 2011

What Did They Expect?!

It seems both Nick Clegg and David Willetts are surprised and disappointed that universities are thinking about charging the full £9000 they are allowed to charge students for an education under the Coalition's reforms.

Duh!  You cut off university funding, and allow them to make it up by charging fees and then you're surprised they do that?!

Willetts's comments are bizarre - these universities may get caught out?  Well duh!  Of course they might, you're making it a marketplace!  Then they'll change when they realise, instead of being told what to do by government...

Nick Clegg's comments though take the biscuit - it's not up to the universities what fees they set?!  I thought that was the entire point of the reform? Seems like a very confused man these days Nick Clegg...

Sunday 13 February 2011

Blog Resurrection

So it turns out that the link in the previous post no longer works. I left Oxford University and now I am employed by the University of Birmingham - although they don't give me webspace so I have to buy my own.  Running a blog on my website though has turned out to be cumbersome, whereas these web based things are much more flexible and easy. And now I have a nice app from the Google Chrome Store to cumulate all my blogs into one window, well it's never been easier.

I probably have too many blogs, but I don't have one where I can simply write about anything, so that's what I think I'll resurrect this one for.  I'm an avid reader of many blogs via Google Reader, and hence I often feel the need to comment, but don't know whether I really have an appropriate blog on which to do that commenting, so here goes...