Department of "Huh?!" (Structural Unemployment Edition)
Why oh why can't we have a better press corps?
Allison Schrager:
Fiscal policy: Digging oneself into a hole?: A few weeks ago I heard Robert Solow, Nobel Laureate for his work on economic growth, say fiscal stimulus via government spending was necessary and the most effective tool we currently have to reduce unemployment. Paul Krugman has not been shy about advocating a similar position. At last week's Buttonwood gathering Joe Stiglitz also favoured a Keynesian style push. Chicago’s Ragu Rajan was more sceptical, and thought it would be better to focus on long-term structural problems like a labour force that lacks globally competitive skills and income inequality. The Minneapolis Fed’s Narayana Kocherlakota also doubts how effective stimulus will be when it seems that much of unemployment is structural and not easily remedied by government expansion...
I know of no evidence that much of unemployment is structural and not easily remedied by government expansion.
If unemployment were structural, and not easily remedied by government expansion, inflation right now would be stable or rising. It is not:
This is not rocket science, people!
