Grasping Reality on TypePad, by Brad DeLong

• Bob Reich: Much Ado About MOOCs: "Champions of MOOCs and online learning frequently exhibit a lamentable techno-utopianism…. I believe that MOOCs, over the coming years, will do better than a large lecture class with little or no opportunity for discussion and for which student assessments are machine-graded exams or problem sets. It’s worth noting that such lecture courses constitute the norm for millions of students across all levels of higher education…. Taming the cost disease is an important task for a variety of reasons: making higher education more affordable, more accessible, and reversing the generation-long rise of higher education costs far beyond the inflation rate…. Online education holds the promise of delivering better learning outcomes at lower cost for students whose alternative is not nothing but a traditional college class. The San Jose State philosophers are right to question the introduction of JusticeX into their department. But it remains an open question, one worth pursuing, whether MOOCs and other forms of online learning will realize their greater goal."

• Daniel Davies: Guest Post: The IMF in Greece Mistakes We Knew We Were Making: "I am not sure that I would have chosen the job of 'Professional Apologist For Extremely Problematic People And Organisations' on the graduate milk-round, but I also suspect that if it was a choice between that and losing my benefits, I’d have the sense to realize that I’m more temperamentally suited to that than many other things. And it does strike me that in the specific case of Greece, the IMF deserves a fairer shake than it got…. Mind you, I need two subheadings and a conclusion to make my case, which is usually a sign that it’s wrong, and I still basically end up criticizing the IMF staff… (1) This Isn’t Your Parents’ 180% Debt Ratio…. Greece’s intra-EU official sector debt looks much more like borrowings from the Bank Of Mum And Dad than Argentina or Indonesia’s external debts ever did…. The program needs to be assessed on the basis of the cash flows, not the debt stocks, precisely because this is not a case where double-entry bookkeeping is appropriate; the true debt burden of Greece isn’t necessarily equal to the sum of past borrowings…. (2.) Rome Wasn’t Built In A Day, Minister. I admit it, I was the only viewer of “Yes Minister” who used to cheer for Sir Humphrey, but really – RWBIADM…. And in so far as is possible, you don’t set hares running by talking about massive apocalyptic scenarios more than you absolutely have to…. (3) Conclusion. In the end, I think people just hate the IMF debt sustainability analysis because it was so far off, and it was a political compromise. Fair enough, if a private sector bank or quoted company printed anything into the markets that was so clearly in bad faith I would be jumping up and down and calling the regulators. But really…. If I was a Greek diabetic in a hospital running out of insulin, I think I’d like to be sure that if I was having my health sacrificed for something, it would be a bit more significant than the sacred purity of IMF debt sustainability analyses. Sure, it’s wrong to sign off on a dishonest document, but there are always get-outs when the consequences are disastrous…. I’m not Dr Pangloss here. This wasn’t the best of all possible programs in the best of all possible worlds. But it was a decent stab at a compromis… I do not agree that this time was entirely wasted, just because some of it was spent chasing up a blind alley of Eurobonds."

• Paul Krugman: The Hellenization of Economic Policy: "Simon Wren-Lewis has been on a roll lately; his latest talks about how the mishandling of Greece inflicted vast damage on the European economy as a whole… troika officials refused to admit the obvious and allow an early Greek default; instead they made absurd claims for the effectiveness of austerity, and in so doing spread austerian economics far and wide. So in a way we’ve had the worst of all possible worlds: the alleged prospect of becoming another Greece has been used by austerians to frighten politicians and the public into policies that deepen the slump, and the mishandling of Greece — by many of the same people spreading this fear — has made the prospect of becoming another Greece even more frightening. The IMF, at least, seems to have learned something from the experience.But as Wren-Lewis says, there is no hint of rethinking or remorse at the ECB, which is at this point the player that really matters."

• Mark Thoma: Economist's View: Why Do Disability Filings Rise in Bad Times?: "Jesse Rothstein finds that the rise in disability filings in recessions is not due to people 'exaggerating real disabilities or through outright fraud'… Basically, people with disabilities face a choice, apply (and likely get) disability, or continue working in another occupation where the disability is less of (or not) an obstacle. In bad times, alternatives that will allow the disabled to continue working in another occupation dry up, and the first choice -- going on disability -- is more likely. As the article notes, once this (expensive) choice is made it is generally not reversed when the economy improves."

• Simon Wren-Lewis: Why Bernanke was right to speak out on fiscal policy: "A ‘monetarist’ position which is indifferent to what fiscal policy is doing in current circumstances is untenable. As a result, central bankers have to speak out on the dangers of austerity. There are two lines that monetarists might take. The first is that unconventional monetary policy, Quantitative Easing (QE), is a perfect substitute for conventional monetary policy. The second is that an appropriate monetary policy regime can, through expectations, undo the restriction imposed by the zero lower bound (ZLB)…. The first argument is wrong mainly because of uncertainty. Macroeconomists know little enough, but we do know something about how conventional monetary and fiscal policy works, and we have a lot of data that can help us…. The second argument would be right if we could fix inflation expectations in exactly the same way as we could, absent the ZLB, fix nominal interest rates. Would a nominal GDP target do that? Of course not…. But let us just suppose it did. Does that mean we can ignore fiscal policy? Absolutely not. What we are getting in this case is a recovery achieved by raising expected inflation above (in the UK, US and Eurozone) 2%. That is costly, because it means actual inflation must be allowed to go above 2%. The more we deflate demand through fiscal austerity, the higher inflation has to go (or the longer it has to be above 2%). So monetarists who believe in the expectations channel cannot be indifferent to fiscal policy, unless they also believe it has no effect, or that inflation above 2% is costless…. The idea that to speak this truth is wrong because it might frighten the horses is silly. I have used the following analogy before. No one wants to hear a pilot tell passengers that they are no longer in control of the plane. However a better analogy in this case would be the pilot not telling the co-pilot, which would be highly dangerous. The horses that matter here are those in charge of fiscal policy, and they need frightening."

Bernhard Warner: Ancient Roman Concrete Is About to Revolutionize Modern Architecture | Brad DeLong (2010): After Copenhagen: What Can Be Done to Meet the Economic and Environmental Challenges? | Josh Bivens (2010): Budgeting For Recovery—The Need to Increase the Federal Deficit to Revive a Weak Economy | Martin Wolf: Globalisation | Robin Harding: IMF denounces US fiscal policy | Andrew Fieldhouse: How much can tax policy curb income inequality growth? Maybe a lot/a> Rising Income Inequality and the Role of Shifting Market-Income Distribution, Tax Burdens, and Tax Rates | Austin Frakt: MedPAC on Medicare Premium Support |