PGL: Keynesian Economics vs. Normal Economics: "I wonder what the negative supply-side event was back in 1982 when we had a massive decline in real GDP? Was it those lower tax rates from the 1981 tax cut? Or the Republican led reductions in transfer payments? Oh wait—wrong sign. Or maybe the dollar appreciation except for the fact that in Barro's world we ignore the aggregate demand effects and focus on the increase in wages relative to the prices of imported goods. Oh dear-wrong sign again!...
#commentoftheday
