Thursday, September 29, 2016


Regular readers of this blog know that I often disagree with Paul Krugman.  But I come here today to agree with a recent post of his on the analysis put out by two Trump economic advisers.  The Trump advisers' analysis is truly disappointing (though perhaps not surprisingly so, given what the candidate has said over the course of the campaign).

Their analysis of trade deficits, starting on page 18, boils down to the following: We know that GDP=C+I+G+NX.  NX is negative (the trade deficit).  Therefore, if we somehow renegotiate trade deals and make NX rise to zero, GDP goes up!  They calculate this will bring in $1.74 trillion in tax revenue over a decade.

But of course you can't model an economy just using the national income accounts identity. Even a freshman at the end of ec 10 knows that trade deficits go hand in hand with capital inflows.  So an end to the trade deficit means an end to the capital inflow, which would affect interest rates, which in turn influence consumption and investment.

I suppose that their calculations might make sense in the simplest Keynesian Cross model, in which investment is exogenously fixed  and consumption only depends on income.  But that is surely not the right model for analyzing the impact of trade policy over the course of a decade.

Wednesday, September 28, 2016

A Trailer for the Pigou Club

Saturday, September 17, 2016

Bank stocks are just as risky now as they were before the financial crisis

That is the most interesting thing I learned at the recent BPEA meeting.  Click here to learn more.

Wednesday, September 14, 2016

Diagnosing and Treating the Slow Recovery

Monday, September 12, 2016

We're number one!

Ec 10, that is.  And another economics course is number four.

Saturday, September 10, 2016

Equity and the Estate Tax

Click here to read my column in Sunday's NY Times.

Thursday, September 08, 2016

Wehner on Orwell on Fierce Modesty

I enjoyed this essay by Peter Wehner.  It is not about economics, but the lesson should be heeded by anyone who engages in the national debate over economic policy.

Wednesday, September 07, 2016

Economics Teaching Conference

Economics educators may be interested in this upcoming conference. Frank Conway, founder of the Economic Rockstar, will interview me at the conference.

Saturday, September 03, 2016

Where I have been eating

For readers in the Boston area, here is a restaurant recommendation: Tiger Mama.  Fun, Southeast Asian-inspired food from Chef Tiffani Faison. In the Fenway area of the city.

Friday, August 26, 2016

Big Idea #6

Uwe Reinhardt on Obamacare

The Princeton health economist sees a coming death spiral: "If you got a bunch of Princeton undergrads to design a health care system, maybe they would come up with an arrangement like the marketplaces."

Thursday, August 25, 2016

A Survey of CEA Economists

Not a single one endorses Mr. Trump, says the Wall Street Journal.

Wednesday, August 24, 2016

Summer Readings

Here are some of the books I have read this summer, all recommended.
  1. Nobody's Fool by Richard Russo
  2. Success and Luck by Robert Frank
  3. The Upside of Inequality by Edward Conard
  4. Hillbilly Elegy by J.D. Vance

Friday, August 19, 2016

Big Idea #5

Thursday, August 18, 2016

Why many men aren't working

Wednesday, August 17, 2016

Debunking Scandinavia Envy

Fact of the day: "Danish-Americans have a measured living standard about 55 percent higher than the Danes in Denmark. Swedish-Americans have a living standard 53 percent higher than the Swedes, and Finnish-Americans have a living standard 59 percent higher than those back in Finland."

Tuesday, August 16, 2016

Borjas on Vetting Immigrants

Thursday, August 11, 2016

Big Idea #4

Monday, August 08, 2016

Big Idea #3

Sunday, August 07, 2016

The Scandinavian Fantasy