Ten Years and Eleven Days Ago at Grasping Reality: August 1, 2007
Weekend Reading: Vachel Lindsay **Stephen Vincent Benet**: From John Brown's Body

One Year and Four Days Ago at Grasping Reality: August 8, 2016

Looking back another decade: By August 8, 2007 I had an idea of what was going down:

  • The Odds of Economic Meltdown: Hoisted from the Archives from Ten Years Ago http://www.bradford-delong.com/2016/08/the-odds-of-economic-meltdown-saloncom.html: Hoisted from the Archives from Ten Years Ago: Pretty good, no?: "The past 24 years have been an amazing run as far as the business cycle is concerned. There have been only two recessions, and both of those were short and shallow. But Ben Bernanke and Co. are now at real risk of presiding over the third..."
  • Must-Read: Back before 2008, too much conventional wisdom held that the state of the business cycle did not matter much for the standard of living of those who did not own much capital. If inflation was to remain constant over time, a high-pressure economy that pushed inflation up had to be offset by an equal and opposite low-pressure economy that pushed inflation down, and so there was no permanent first-order gain for the working class from working hard to try to improve stabilization policy performance. This was, I think, always false. But now it is obviously false. It now seems very unlikely we will get any rapid growth of potential output without a high pressure economy. And, as Larry says: "Tight labour markets are the best social program": Lawrence Summers: The Progressive Case for Pro-Growth Policies
  • Must-Read: Once more: the importance of the zero lower bound in generating asymmetric risks, and the importance of asymmetric risks in generating a policy bias toward substantial easing. The reason is the same as the reason that you stand well out to sea when sailing from Point Arena to San Francisco: Paul Krugman: Prudential Macro Policy: Monetary: http://www.bradford-delong.com/2016/08/must-read-paul-krugman-_prudential-macro-policy-the-new-york-times_-prudential-macro-policy-august-7-2016.html

The List:

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