Aretha Franklin: A Change Is Gonna Come: For the Weekend

Hysteresis: Some Fairly-Recent Must- and Should-Reads

stacks and stacks of books

  • The empirical studies are finding more and more hysteresis—more hysteresis in the sense of a persistent downward shadow cast by a recession than I would have believed likely. I keep hunting for something wrong with these studies. But there are too many of them. And they all—at least all those published that cross my desk—point in the same direction: Karl Walentin and Andreas Westermark: Stabilising the real economy increases average output: "DeLong and Summers (1989)... argue that (demand) stabilisation policies can affect the mean level of output and unemployment...

  • As Chief Acolyte of the "hysteresis view", I must protest! The "hysteresis view" has proved correct: Benoît Cœuré: Scars that never were?: Potential output and slack after the crisis: "To be clear... I do believe that deep recessions can have effects on the supply capacity of the economy that may take some time to unwind...

  • We are not yet at maximum feasible employment: Jared Bernstein: Employment Breakeven Levels: They’re higher than most of us thought: "We know neither the natural rate of unemployment nor the potential level of GDP...

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