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Part of my continuing attempt to think through the Decline of the Chicago School--here I try to argue that Milton Friedman tried too hard to sell a stable nominal money growth rule as a laissez-faire policy, and thus undermined the ability of his students' students to actually say anything coherent ...

A correspondent critiques my overexcited critique of John Cochrane: I read your blog post today on John Cochrane’s new article, and I think you are misreading him.... Look at the first paragraph in the section entitled “A monetary argument for fiscal stimulus.” In the end, John con...

I am watching Eugene Fama, Robert Lucas, and now John Cochrane stagger around assuring everyone that fiscal policy cannot boost employment and production--no matter how high the unemployment rate and how much unused capacity there is--as a matter of "just accounting" that "does not need a complex ar...

TPMCafe | Talking Points Memo | What Is Non-Depression Economics?: This discussion has so far one major lack: it does not tell us what "depression economics" is supposed to replace--it does not tell us what non-depression economics is, or was. So let me try my hand at a definition of non-depression ...

Matthew Yglesias says that these questions are too hard for him. Well, they are too hard for me too: Matthew Yglesias: Questions That Are Too Hard for Me: The way this is “supposed” to work is that Chinese people, being poor but growing rapidly, consume more than they produce. The curren...

Some time ago Ezra Klein asked why we economist types were so happy--well, why all we economist types except those of us with offices on the same hall who will miss her company and must teach her and her husband's courses in the spring--at Barack Obama's decision to choose Great Depression and monet...

Paul Krugman notes that we now have an ongoing test of Keynes-Bernanke vs. Friedman-Schwartz accounts of the Great Depression: Paul Krugman: Has anyone else noticed that the current crisis sheds light on one of the great controversies of economic history? A central theme of Keynes’s General Th...

Apropos of Krugman's evisceration of the underbriefed George F. Will http://delong.typepad.com/sdj/2008/11/what-a-change-t.html: I have never been able to make any sense at all of the right-wing claim that the New Deal prolonged the Great Depression by creating a "crisis of confidence" that crippled...

On September 17, while the financial world was still reeling from the collapse of several Wall Street institutions, a next day air envelope arrived at my house. I probably should have opened it and read its contents before this weekend, because it has a direct bearing on the present crisis. Inside I...