Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)
John Taylor versus Paul Krugman
The conventional wisdom is that recoveries from recessions caused by financial crises are typically slow. John Taylor disputes that claim; Paul Krugman supports it.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Russ Roberts talks with John Taylor
Roberts and Taylor discuss why the current recovery has been so weak. They conclude that bad policy is to blame.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”The Case for Big Banks
Phillip Swagel argues that breaking up big banks will make them too small to succeed and that the business will flow overseas and to the shadow banking system. He says that the Dodd-Frank financial-reform law takes care of the "too-big-to-fail" problem.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Anna Schwartz has passed away
The New York Times presents an obituary of an influential economic historian of the Great Depression.
Textbook References:
Pages 744-745 “Two Big shifts in Aggregate Demand: The Great Depression and World War II”Are mortgage writedowns the answer?
Ted Gayer and Phillip Swagel argue that the government should not reduce the mortgage principal of people who owe more on their mortgage than their house is worth. It also should not refinance them at lower interest rates. Gayer and Swagel contend that it will cost taxpayers a significant amount of money, provide perverse incentives, and will not solve the housing crisis.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Geanakoplos on the Leverage Cycle
In a 55-minute video, John Geanakoplos discusses the role of leverage in recent economic crises. He also suggests ways to reduce the problem in the future.
Textbook References:
Pages 631-632 “Bank Capital, Leverage, and the Financial Crisis of 2008-2009”Pages 745-748 “The Recession of 2008-2009”
True Lessons of the Recession
Raghuram Rajan argues that the real lesson of the recent recession is that we must improve education and training, encourage entrepreneurship, and improve but not "lobotomize" the financial system.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”April 7
Monitoring the So-called Recovery
A graph from the Bureau of Labor Statistics shows a sharp decline in the U.S. employment-to-population ratio since 2008.
Textbook References:
Pages 594-598 “How Is Unemployment Measured?”Pages 745-748 “The Recession of 2008-2009”
How to Teach Aggregate Supply Shocks
Nick Rowe discusses the difficulties of teaching short-run aggregate supply shocks. Mankiw points readers to one of his own papers.
Textbook References:
Pages 738-740 “Why the Short-Run Aggregate-Supply Curve Might Shift”A Profile of Ben Bernanke
Roger Lowenstein defends Bernanke's actions in the recent financial crisis.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
The Limits of Monetary Policy
Brad DeLong argues that stabilization policy cannot always depend on monetary policy alone. Fiscal policy is also sometimes necessary.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
January 12
Judging Presidents
Presidents have far less influence on job creation than many people believe.
Textbook References:
Chapter 28 “Unemployment”Chapter 33 “Aggregate Demand and Aggregate Supply”
The Reincarnation of Keynesian Economics
Is New Keynesian economics really Keynesian? Scott Summers thinks not.
Textbook References:
Page 751 “The Origins of the Model of Aggregate Demand and Aggregate Supply”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
November 12
Supply-side Policies as a Way to Boost Aggregate Demand
A paper from researchers at the Philadelphia Fed argues that structural reforms that increase productivity can also boost aggregate demand via a wealth effect.
Textbook References:
Pages 726-731 “The Aggregate-Demand Curve”November 7
What would John Maynard Keynes have said about Obamacare?
Keynes argued that even necessary reforms might upset business confidence and slow recovery.
Textbook References:
Pages 238-240 “The Fiscal Challenge Ahead”Pages 729-731 “Why the Aggregate-Demand Curve Might Shift”
October 29
My Lecture at Princeton
An hour-long video shows Mankiw's recent lecture at Princeton. In a wide-ranging presentation, he discusses the current state of macroeconomics. In the process he addresses the policy difficulties created by the current slump and the long-term debt crisis.
Textbook References:
Pages 238-240 “The Fiscal Challenge Ahead”Page 561 “Financial Crises”
Pages 568-572 “Policy 3: Government Budget Deficits and Surpluses”
Pages 631-632 “Bank Capital, Leverage, and the Financial Crisis of 2008-2009”
Pages 745-748 “The Recession of 2008-2009”
Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
Pages 812-814 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
October 27
The Budget Deficit
In a 90 minute video, Peter Diamond, Jeff Leibman, Deborah Lucas, Greg Mankiw, and Robert Solow discuss the federal budget deficit. The discussion addresses both short-term and long-term concerns.
Textbook References:
Pages 238-240 “The Fiscal Challenge Ahead”Pages 568-572 “Policy 3: Government Budget Deficits and Surpluses”
Pages 745-748 “The Recession of 2008-2009”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
Pages 823-827 “Should the Government Balance Its Budget?”
October 19
The Latest from Merle Hazard
Merle Hazard performs a song about "too-big-to-fail" banks.
Textbook References:
Pages 272-273 “Economies and Diseconomies of Scale”Pages 631-632 “Bank Capital, Leverage, and the Financial Crisis of 2008-2009”
Pages 745-748 “The Recession of 2008-2009”
October 8
Policy Uncertainty
Scott Baker, Nicholas Bloom, and Steven Davis argue that policy uncertainty is hurting the recovery. Sources of policy uncertainty include U.S. and European debt problems, the legal status of the recent health-care legislation, and mixed signals about future tax laws.
Textbook References:
Pages 729-730 “Why the Aggregate-Demand Curve Might Shift”September 28
Peter Diamond on Stimulus
Peter Diamond discusses the need for more economic stimulus in a 24- minute interview.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
September 24
A Conversation with Robert Lucas
Robert Lucas talks about the effects of high marginal tax rates on growth, about the recent financial crisis, and about rational expectations.
Textbook References:
Pages 7-9 “Principle 4: People Respond to Incentives”Page 561 “Financial Crises”
Pages 631-632 “Bank Capital, Leverage, and the Financial Crisis of 2008-2009”
Pages 745-748 “The Recession of 2008-2009”
Pages 789-795 “Shifts in the Phillips Curve: The Role of Expectations”
September 20
The Case for More Quantitative Easing
Joe Nocera argues that the problem with the economy is a lack of credit. He therefore argues for another round of quantitative easing.
Textbook References:
Pages 745-746 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 812-814 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
September 14
Hayek and Keynes
An Excerpt from Silvia Nasar's book The Grand Pursuit: The Story of Economic Genius discusses Keynes and Hayek.
Textbook References:
Pages 10-11 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”Pages 11-13 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Page 342 “Galbraith versus Hayek”
Page 751 “The Origin of the Model of Aggregate Demand and Aggregate Supply”
Pages 773-779 “Using Policy To Stabilize The Economy”
September 10
Fixing Our Sick Economy
Two essays, one by Mankiw and the other by Robert Barro, address the causes of the weak recovery, and suggest possible solutions.
Textbook References:
Pages 7-9 “Principle 4: People Respond to Incentives”Pages 250-251 “Who Pays the Corporate Income Tax?”
Pages 250-251 “The Value-Added Tax”
Page 568 “Policy 2: Investment Incentives”
Pages 745-748 “The Recession of 2008-2009”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
September 4
Reflections of a Former Student
The British shadow chancellor discusses the real Keynes, not the caricature.
Textbook References:
Page 751 “The Origins of the Model of Aggregate Demand and Aggregate Supply”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
August 30
Glaeser on Mortgage Modification
A recent proposal would allow people with government-backed mortgages to refinance them at today's lower interest rates. Proponents claim it is a cost-free way to boost the economy. Edward Glaeser argues that it will not boost the economy and it will cost taxpayers a lot of money.
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 11-13 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Pages 745-748 “The Recession of 2008-2009”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
August 21
Split-Rated
Curtis Threadneedle (a.k.a. Merle Hazard) sings a humorous song about the downgrade in the U.S. credit rating.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 570-572 “The History of U.S. Government Debt”
August 9
I Talk to Larry Kudlow
Mankiw discusses what the Fed might do to boost the weak recovery and avoid a double-dip recession.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
August 8
I Talk to Reuters
Mankiw discusses the current U.S. debt crisis and what the Fed can do to boost the weak recovery.
Textbook References:
Pages 238-240 “The Fiscal Challenge Ahead”Page 561 “Financial Crises”
Pages 568-572 “Policy 3: Government Budget Deficits and Surpluses”
Pages 745-748 “The Recession of 2008-2009”
Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
August 6
Federal Nondefense Spending (as a % of GDP)
A chart from the Bureau of Economic Analysis shows how Federal nondefense spending as a share of GDP has risen sharply in the past few years.
Textbook References:
Pages 234-241 “A Financial Overview of the U.S. Government”Pages 745-748 “The Recession of 2008-2009”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
August 6
Former Fed Officials Opine
A 27-minute video shows three former Fed officials discussing what the Fed can do to support the weak recovery.
Textbook References:
Pages 745-748 “The Recession of 2008-2009”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
August 4
Rogoff on the Great Contraction
Kenneth Rogoff argues that it is wrong to compare the recent recession to a typical recession. The real issue is that the world economy is badly overleveraged, and "and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation."
Textbook References:
Page 561 “Financial Crises”Pages 631-632 “Bank Capital, Leverage, and the Financial Crisis of 2008-2009”
Pages 745-748 “The Recession of 2008-2009”
July 21
The Subprime Mortgage Crisis
Christopher Foote and Paul Willen examine two different theories of why the subprime mortgage crisis occurred.
Textbook References:
Pages 468-473 “Asymmetric Information”Pages 480-481 “People Aren't Always Rational”
Page 561 “Financial Crises”
Pages 745-748 “The Recession of 2008-2009”
July 12
GSE Fact of the Day
By 2008 half of all mortgages were excessively risky, and government sponsored enterprises such as Fannie Mae owned 12 million out of 27 million such loans.
Textbook References:
Pages 11-13 “Principle 7: Governments Can Sometimes Improve Market Outcomes”Page 561 “Financial Crises”
Pages 745-748 “The Recession of 2008-2009”
July 8
The Disappointing Recovery
A chart shows that the civilian employment to population ratio remains roughly 5 percentage points below its pre-recession level.
Textbook References:
Pages 598-599 “Does the Unemployment Rate Measure What We Want It To?”Pages 720-722 “Three Key Facts about Economic Fluctuations”
Pages 745-748 “The Recession of 2008-2009”
July 1
Housing Tax Subsidies
The preferential tax treatment of owner-occupied housing distorts capital allocation in the U.S. economy.
Textbook References:
Pages 6-7 “Principle 3: Rational People Think at the Margin”Pages 7-9 “Principle 4: People Respond to Incentives”
Pages 745-748 “The Recession of 2008-2009”
June 30
Economist as Movie Reviewer
Economist Phillip Swagel critiques two movies about the recent financial crisis.
Textbook References:
Page 561 “Financial Crises”Pages 745-748 “The Recession of 2008-2009”
June 2
Lucas on the Great Recession
Robert Lucas discusses the recent recession in an historical context. He worries that the government is now doing too much.
Textbook References:
Pages10-11 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”Pages 11-13 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Pages 744-745 “Two Big Shifts in Aggregate Demand: The Great Depression and World War II”
Pages 745-748 “The Recession of 2008-2009”
Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
Pages 767-773 “How Fiscal Policy Influences Aggregate Demand”
Pages 773-779 “Using Policy To Stabilize The Economy”
May 31
Household Expectations
The recent recession created an unusual amount of consumer pessimism.
Textbook References:
Pages 749-751 “Why the Aggregate-Demand Curve Might Shift”May 13
Evaluating the ARRA
Tom Conley and Bill Dupor argue that the recent fiscal stimulus (the American Recovery and Reinvestment Act) actually destroyed more jobs than it saved.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 560-572 “Economic Growth and Public Policy”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
May 7
Macroeconomic Uncertainties
Mankiw discusses three macroeconomics questions that perplex him. He also emphasizes the importance of humility for macroeconomists.
Textbook References:
Page 740 “Fact 1: Economic Fluctuations are Irregular and Unpredictable”Pages 760-761 “Why the Short-Run Aggregate-Supply Curve Might Shift”
April 16
My Talk From Yesterday
A video shows Mankiw's talk at the University of Cincinnati. He provides a brief history of macroeconomics, discusses current monetary and fiscal policy, and discusses the long-run fiscal situation.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 539-541 “Real and Nominal Interest Rates”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
April 2
A V, 2 Us, and an L
The U.S. Department of Labor presents a graph of the civilian employment to population ratio.
Textbook References:
Pages 614-623 “Identifying Unemployment”Pages 740-742 “Key Facts About Economic Fluctuations”
March 16
The Chinese Currency Question
Paul Krugman argues that China is hurting the global economy by undervaluing its currency. Mankiw disagrees.
Textbook References:
Pages 703-706 “The Prices for International Transactions: Real and Nominal Exchange Rates”Pages 747-748 “The Price Level and Net Exports: The Exchange-Rate Effect”
Page 778 “The Exchange Rate Effect”
March 15
Shiller's Prognosis
Robert Shiller argues that economic crises are hard to predict because macroeconomic knowledge is so limited.
Textbook References:
Pages 654-655 “The Financial Crisis of 2008”Page 657 “Bank Runs and the Money Supply”
Chapter 33 “Aggregate Demand and Aggregate Supply”
Chapter 34 “The Influence of Monetary and Fiscal Policy on Aggregate Demand”
February 25
MIT Symposium
A 2-hour video presents a wide-ranging discussion of macroeconomic issues. Participants are Olivier Blanchard, Pedro Aspe, Robert Gordon, Paul Krugman, Greg Mankiw, and Christina Romer.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 654-655 “The Financial Crisis of 2008”
Chapter 32 “A Macroeconomic Theory of the Open Economy”
Page 750 “The 2008 Fiscal Stimulus”
Pages 778-787 “Monetary Policy Influences Aggregate Demand”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
February 12
Jobs, Jobs, Jobs
Should the government embrace anything that creates jobs, or should it consider the long-run value of its projects?
Textbook References:
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”Pages 25-28 “Our Second Model: The Production Possibilities Frontier”
Page 742 “Fact 3: As Output Falls, Unemployment Rises”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
January 28
NPR reports...
National Public Radio reports on discussions held at M.I.T. about the financial crisis and what can be done now to help the economy. The participants were not optimistic about the near term.
Textbook References:
Pages 654-655 “The Financial Crisis of 2008”Page 750 “The 2008 Fiscal Stimulus”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
October 23
Goolsbee, Deconstructed
Keith Hennessey comments on Austin's Goolsbee's assertions about recent economic policy and performance.
Textbook References:
Pages 34-36 “Why Economists Disagree”
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
October 18
Hear Me Squawk
Mankiw discusses a variety of issues including marginal tax rates, long-term deficits, and ways to stimulate the economy.
Textbook References:
Page 6 “Principle 3: Rational People Think at the Margin”Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 160-164 “The Deadweight Loss of Taxation”
Pages 246-248 “The Fiscal Challenge Ahead”
Page 399 “The Trade-off Between Work and Leisure”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 749-751 “Why the Aggregate-Demand Curve Might Shift”
Page 750 “The 2008 Fiscal Stimulus”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
October 3
The Debate Over Fiscal Adjustment
The conventional wisdom is that a fiscal contraction will cause GDP to contract in the short run. Yet spending cuts that restore confidence that deficits are not out of control might not have an adverse effect on GDP.
Textbook References:
Pages 749-751 “Why the Aggregate-Demand Curve Might Shift”Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
July 21
Harvardians in the FT
Kenneth Rogoff argues against more fiscal stimulus. Lawrence Summers supports short-term stimulus combined with medium and long-term deficit reduction. Niall Ferguson argues that Keynesian policies are misguided.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 842-843 “Dealing with Deficits”
July 16
Median Duration of Unemployment
The Bureau of Labor Statistics reports that the median duration of unemployment in this recession is much higher than in previous recessions.
Textbook References:
Page 621-622 “How Long Are the Unemployed Without Work”Pages 740-742 “Three Key Facts About Economic Fluctuations”
July 14
The CEA's Impossible Job
The Council of Economic Advisors to the President is charged with counting the number of jobs created by the fiscal stimulus. It's an impossible task.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
July 6
An Interview with Bob Hall
A wide-ranging interview with Robert Hall touches on a variety of topics.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 566-567 “Property Rights and Political Stability”
Pages 604-605 “The Trade-Off Between Risk and Return”
Pages 654-655 “The Financial Crisis of 2008”
Pages 740-742 “Three Key Facts About Economic Fluctuations”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
June 27
Links
There are five links sent in by readers. Four of them are humorous, but one, "Ten Commandments for Fiscal Adjustment," is serious.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 560-572 “Economic Growth and Public Policy”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
June 26
My Latest
Mankiw discusses the difficulties faced by the President's economic team in diagnosing and treating the economic crisis. He suggests that macroeconomists need to be humble.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 830-832 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
May 9
Ferguson on Posner
Niall Ferguson reviews Richard Posner's new book, The Crisis of Capitalist Democracy. Posner argues that Congress is trying to fix the financial system without fully understanding it. He also points out that by attacking bankers, politicians are distracting attention away from their own role in the current crisis.
Textbook References:
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
Pages 830-832 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy”
April 17
The Latest from the CEA Chair
CEA Chair Christina Romer reports on what has been done to fight the current recession and discusses what else can be done.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Pages 246-248 “The Fiscal Challenge Ahead”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
Chapter 34 “The Influence of Monetary and Fiscal Policy on Aggregate Demand”
Pages 830-832 “Monetary And Fiscal Policymakers Try To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
April 2
Barro on the Great Depression
Robert Barro questions the Keynesian multiplier and suggests that Friedman and Schwartz had a better understanding of the Great Depression than Keynes.
Textbook References:
Page 657 “Bank Runs and the Money Supply”Pages 767-766 “Two Big Shifts in Aggregate Demand: The Great Depression and World War II”
Page 770 “The Origins of Aggregate Demand and Aggregate Supply”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy to Stabilize the Economy”
Pages 830-832 “Should Monetary and Fiscal Policymakers Try to Stabilize the Economy?”
April 2
Keynes: Economics as Impressionism
Sir John Hicks suggests that The General Theory is best viewed in the same way as an Impressionist painting: The details may be ugly but the overall picture is worth seeing.
Textbook References:
Page 770 “The Origins of Aggregate Demand and Aggregate Supply”March 16
The Chinese Currency Question
Paul Krugman argues that China is hurting the global economy by undervaluing its currency. Mankiw disagrees.
Textbook References:
Pages 703-706 “The Prices for International Transactions: Real and Nominal Exchange Rates”Pages 747-748 “Price Level and Net Exports: The Exchange-Rate Effect”
Page 778 “The Exchange Rate Effect”