good advice for knowledge seekers of all ages !
" start with a representative agent. "
whoops ...just one mr. manly ? ..keep reading voyageurs
-------------------------
What about rat ex ?
" may seem like an
extreme position. But the alternative is to assume
we know what kind of mistakes agents will make. "
no the opposite is to assume heterogenious experience
and fragile self morphing "agent inner models"
we know what kind of mistakes agents will make. "
no the opposite is to assume heterogenious experience
and fragile self morphing "agent inner models"
" I’m sure different agents
are using different models from the one I’m using, but I have no idea what these
models are. "
so ? just that fact oughta steer u clear of a single agent assumption ...no ?
"To keep things simple, I therefore assume I do not know what
mistakes they will make, which implies rational expectations."
that is as good an instance of calling a damn fools leap a deductive inference
i've seen since the nixon white house fired
H R Haldeman
that is as good an instance of calling a damn fools leap a deductive inference
i've seen since the nixon white house fired
H R Haldeman
" If I want to be
more realistic, I can look at the huge mainstream literature on models of
learning. It is not a field I know well, but if there is a message there that we
should go back to assuming adaptive expectations, I have missed it. "
ya ya we are a learning species but why rat ex is better then adaptive as a proxy is far fom clear regardless of what the venality streaked
"literature "presumes
in its self boasting ignorance and sponsored or at least rewarded
limited liability aesopian hunching and just so story telling
---------------------------------------
questioning minds need a fancy washing
"literature "presumes
in its self boasting ignorance and sponsored or at least rewarded
limited liability aesopian hunching and just so story telling
---------------------------------------
questioning minds need a fancy washing
"why assume a representative agent and rational expectations. "?
"does this inevitably lead to laissez-faire results. "?
answers are left unstated don't u know
good old fashion socratic humanist non washing mind framing
let the mere frame default the subject into a pro market anti interventionist tilt
then hit em with an apple pie declarative :
answers are left unstated don't u know
good old fashion socratic humanist non washing mind framing
let the mere frame default the subject into a pro market anti interventionist tilt
then hit em with an apple pie declarative :
"The
ultimate test is empirical relevance of course"
" here's why I find thinking
about a representative agent and rational expectations gives more plausible
answers than using pre-microfoundations analysis."
"I’ll keep things as simple as I can and leave out most caveats and
qualifications."
in other words
here comes a tap dance cover for a slow set up ....comrades
in other words
here comes a tap dance cover for a slow set up ....comrades
" what is the impact on output of a balanced budget
increase in government spending in an open economy stuck at the zero lower bound
(ZLB)? "
wow arch eli gandolf bob shillsters big hype
no deficit turds left on the trail to recovery here
recovery ?
"Well the first thing we have to do is ask whether the increase is
permanent or temporary. "
"If it’s permanent, if the import content of government spending is similar to consumer spending, and if taxes are lump sum, the answer is nothing."
can't forever tune up the system ala joe stigasaurus's
inter income class tax and transfer proposal
noticed in a recent post at
inequality 2012 :
http://inequality2012.blogspot.com/2012/07/three-cheers-for-joe-stiglitz.html
why ?
seems
" if the tax increase is permanent"
then consumption falls by the same amount "
bingo
" no net impact on total demand for domestic output"
the added government spending is exactly displaced
by subtracted tax paying household spending
recall there is by construction just one immortal household here
kool eh ?
----------------------
post script :
manly adds " That is pretty obvious"
just in case you were about to say to yourself
"what the fuck ?? ...that's not obvious at all "
"If it’s permanent, if the import content of government spending is similar to consumer spending, and if taxes are lump sum, the answer is nothing."
can't forever tune up the system ala joe stigasaurus's
inter income class tax and transfer proposal
noticed in a recent post at
inequality 2012 :
http://inequality2012.blogspot.com/2012/07/three-cheers-for-joe-stiglitz.html
why ?
seems
" if the tax increase is permanent"
then consumption falls by the same amount "
bingo
" no net impact on total demand for domestic output"
the added government spending is exactly displaced
by subtracted tax paying household spending
recall there is by construction just one immortal household here
kool eh ?
----------------------
post script :
manly adds " That is pretty obvious"
just in case you were about to say to yourself
"what the fuck ?? ...that's not obvious at all "
------------------------------------------------
to be sure he's put the kill shot in manly writes :
" anyone using a schlock keynesian balanced budget multiplier model
would get this wrong
since they would have assumed mpc<1 "
get it wrong ?
in reality or only in mainly nonsense-ville
ie
in manly's stick figure ...anti june bug effect...console referencing...
single agented.... ersatz gadget rigorous.... euler oiled ....
kandy ass of a model !
since they would have assumed mpc<1 "
get it wrong ?
in reality or only in mainly nonsense-ville
ie
in manly's stick figure ...anti june bug effect...console referencing...
single agented.... ersatz gadget rigorous.... euler oiled ....
kandy ass of a model !
-----------------------
fortunately for his birth in heaven
our doc manly is a middle pather
to the end
sooooooooooo...
after taking away slavation for us joblings
with one hand
he restores a piece of the keynesian loaf to us
with the other :
---------------------------------------------------
"however citizen savants "
" If the government spending increase is temporary
so that the tax increase is also temporary.....
our single optimising consumer
immediately gets us the result
that we activists want "
"even though the single consumer/single tax payer's
consumption will initially fall
it will fall by less than government spending will increase"
hence
" there is a short run net increase in demand. " !!!!!
fiscal action is at least effective
if not very efficient in Manlonia
cause
"Higher demand raises output and income".
and If "inflation does not change
we get a multiplier of one"
errr so long as there are "no imports. "
ie we get the schlock keynesian balanced budget multiplier
in a closed system ....
a short burst of temporary surtax funded
increased government direct spending
---so long as the usual leakages taxes and imports are nullified (by construction)---
will increase present period total private output and employment
dollar for dollar ....no wall street horrors ..no "crowding out "
we're able to pull ourselves out of the red
we don't have to wait for the corporates to resume "investment "
or borrow on our tree house
----------------------------------------------" If the government spending increase is temporary
so that the tax increase is also temporary.....
our single optimising consumer
immediately gets us the result
that we activists want "
"even though the single consumer/single tax payer's
consumption will initially fall
it will fall by less than government spending will increase"
hence
" there is a short run net increase in demand. " !!!!!
fiscal action is at least effective
if not very efficient in Manlonia
cause
"Higher demand raises output and income".
and If "inflation does not change
we get a multiplier of one"
errr so long as there are "no imports. "
ie we get the schlock keynesian balanced budget multiplier
in a closed system ....
a short burst of temporary surtax funded
increased government direct spending
---so long as the usual leakages taxes and imports are nullified (by construction)---
will increase present period total private output and employment
dollar for dollar ....no wall street horrors ..no "crowding out "
we're able to pull ourselves out of the red
we don't have to wait for the corporates to resume "investment "
or borrow on our tree house
speaking of leakages ...
now lets up the complexity a notch
lets talk about a national system
that trades with other national systems :
"In an open economy, what will happen to the exchange rate
if we have a temporary balanced budget increase in government spending, lasting no longer than the period interest rates are stuck at zero."
if we have a temporary balanced budget increase in government spending, lasting no longer than the period interest rates are stuck at zero."
" Everyone remembers
their Mundell Fleming – under flexible exchange rates fiscal policy is
ineffective, because the exchange rate appreciates to crowd out the additional
demand."
clever move eh
here manly raise an old fiscal activist bugaboo
from the early 60's
the bob mundell stymie
from within schlock keynesianism's on version of is/lm modeling
saints alive
" that is completely wrong inside our rate ex single agent intertemporal model RE-inter T - SA model world"
the bastards more progressive more job class friendly more fiscal activist
for christ's sake then open schlock K
not less progressive !
thanx to some asset market magic :
" Agents in the foreign exchange markets will note that there is going to be no increase in long run interest rates and no change in the steady state (so no long run appreciation or depreciation), so there is no reason for the exchange rate to move in the short run either. "
"There is no crowding out through the exchange rate,
so the analysis on the balanced budget effect
stands."
clever move eh
here manly raise an old fiscal activist bugaboo
from the early 60's
the bob mundell stymie
from within schlock keynesianism's on version of is/lm modeling
saints alive
" that is completely wrong inside our rate ex single agent intertemporal model RE-inter T - SA model world"
the bastards more progressive more job class friendly more fiscal activist
for christ's sake then open schlock K
not less progressive !
thanx to some asset market magic :
" Agents in the foreign exchange markets will note that there is going to be no increase in long run interest rates and no change in the steady state (so no long run appreciation or depreciation), so there is no reason for the exchange rate to move in the short run either. "
"There is no crowding out through the exchange rate,
so the analysis on the balanced budget effect
stands."
oh manly
god loves you
you fuzzy little professor of a son of a gun
cause
" the representative intertemporal consumer and rational expectations model
gives better more job class enhancing " answers"
than that old stand by MF is/lm schlock keynesian modified hicks model"
--------------------------------------------------
moving beyond simple feel good :
" to complicate in various ways here
means building on this analysis rather than overturning it. "
my lord
a second fool's leap of epic stature in the same post
i should think doc
the first step out into high complexity
might be
removing the single agency construction spec
so isn't that conceptually half the model gone ....eh ?
means building on this analysis rather than overturning it. "
my lord
a second fool's leap of epic stature in the same post
i should think doc
the first step out into high complexity
might be
removing the single agency construction spec
so isn't that conceptually half the model gone ....eh ?
at any rate see the sunny side here ?
a single agent micro con founded intertemporal macro model
isn't necessarily anti fiscal intervention
why this just so story
tells us
that shillmeister's
beloved balanced budget fiscal expansion
just might work as advertised ....in a closed system
with probably lump some tax rates
and operating " at the ZLB"
