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  • Keynesianism

    Paul Krugman: Selective Data Usage

    Paul Krugman, in the words of a former New York Times public editor, “has the disturbing habit of shaping, slicing and selectively citing numbers.” Most recently, he selectively cited numbers about austerity in Europe, hoping to redefine the policies that made the German economy so buoyant. Germany is worth paying … More

    European Central Bank Lowers Interest Rates, Trumping "Zero Lower Bound" Theory

    The European Central Bank (ECB) lowered a key interest rate to 0.25 percent on Thursday. This is a big deal, since it demonstrates that the ECB has the ability and the will to stabilize euro inflation, which has fallen below the ECB’s target and become a drag on real growth. … More

    Japan’s Revolving Door Tax

    Prime Minister Shinzo Abe is likely to increase Japan’s sales tax from 5 percent to 8 percent next year. Abe and his close ally Haruhiko Kuroda, head of the Bank of Japan, have long advocated for increasing Japan’s money supply by targeting a higher inflation rate in an attempt to … More

    Podcast: Keynes vs. Hayek

    Make sure to listen to a recent radio interview with Nicholas Wapshott, author of the new book, “Keynes Hayek: The Clash That Defined Modern Economics.” What was the relationship between Keynes and Hayek really like? Why did Keynesian thought dominate from WWII until 1980? Why did Hayekian thought dominate from 1980 … More

    Hoover, FDR and Clinton Tax Increases: A Brief Historical Lesson

    The obvious reason to prevent a tax hike by extending current tax rates is that doing so will prevent further economic harm to an already flat economy. How do we know that tax increases will cause economic harm? Three examples: 1932, 1937 and 1993. After the 1929 stock market crash, … More

    On Stimulus, Krugman Feints, Mankiw Parries, Both Miss

    It often happens that flawed theories put into practice expose their internal inconsistencies for all to see before long. We now see this playing out in the case of Keynesian stimulus and the U.S. economy, and the stimulus defenders are at a loss. By any measure, the Keynesian debt-based stimulus … More