Remembering Milton Friedman

Allen Sanderson reminisces about the great economist.

My New Job

As reported by the Harvard Crimson.

Ben and the Bound

There has been a lot of chatter lately about monetary policy under Ben Bernanke's leadership and how his Fed has dealt with the zero lower bound on interest rates.  One of the more thoughtful analyses of this topic I have seen is this paper by Larry Ball.

The President's Economic Rhetoric

As seen by Jim Capretta (with whom I had the pleasure to work when I was in DC some years ago).

Price Controls in Venezuela

From the NY Times, a great article for teaching Chapter 6 of my favorite textbook.

A Defense of Oil Speculation

From economist Jim Hamilton.

CBO looks at the president's budget

The CBO reports:

CBO estimates that the President’s budgetary proposals would boost overall output initially but reduce it in later years. For the 2013–2017 period, under most of the estimates CBO produced using alternative models and assumptions, the President’s proposals would increase real (inflation-adjusted) output (relative to that under current law) primarily because taxes would be lower than those under current law, and, therefore, people’s disposable income and their demand for goods and services would be greater. Over time, however, the proposals would reduce real output (relative to that under current law) because the deficits would exceed those projected under current law, and the effects of increasing government debt would more than offset the favorable effects of lower marginal tax rates on labor income. When the net impact of those two types of effects would shift from an increase in real output to a decrease would depend on various factors, including the impact of increased aggregate demand on output and the effect of deficits on investment. 

By CBO’s estimate, under the President’s proposals, the nation’s real output during the 2013–2017 period would be, on average, between 0.2 percent lower than the amount under current law and 1.4 percent higher than under current law. For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.