The Stimulus Didn’t Help

A recent survey of members of the National Association of Business economists shows that 73% do not think the stimulus help employment.

NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House’s Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.

That sentiment is shared for the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending. More than two-thirds of those polled believe the measure won’t affect payrolls, while 30% expect it to boost hiring “moderately.”

However, most of the economists, 57%, do see conditions improving with increases in industrial demand, profit margins, and spending. Also that they expect GDP growth to be positive for 2010, with most expecting it to exceed 2% and a smaller portion forecasting more than 3% growth.

FILED UNDER: Economics and Business, Government
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. john personna says:

    Hey! I saw that article, and I thought it might end up at OTB. Little did I suspect that it would bring back Steve V!

    I thought the interesting fragment was in the part you quoted, emphasis mine:

    NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House’s Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.

    I guess we could go into my general distrust of economists, as they throw the bones … but really, is there any indication that firms large enough (a) to have economists, and (b) ecomomists in the NABE, are going to be typical of the general economy?

    Really?

    How many landscape or auto repair shops had staff NABE economists to get in on the act?

  2. Drew says:

    At your service, odo…uh, er, “john personna”…….

    I own small businesses; I speak and work with small business owners every day. Have for 20 years now. Not a one has a staff economist.

    But I’ll tell you this. Their report would be alot more dour than NABE.

    Conditions are improving, but my affiliations would tell you it has nothing to do with stimulus spending.

    Carry on.

  3. Robert Bell says:

    Well assuming one accepts the Keynesian planned versus actual expenditure premise, (and that’s a big if) how would a company know what portion of their revenues are due to feedback effects from the stimulus or not, and therefore, whether or not they have been helped, hurt, or not affected by the stimulus?

  4. hehe… Wow, Steve links to a survey that supports his own views and does not bother to consider other evidence. What a surprise!

    And then Drew chimes in supporting Steve with his personal anecdotal “evidence.” Surprise again!

    This is pretty amazing stuff actually. If you can show that $787 billion in additional deficit spending had no impact on the economy, you’d be in a position to overturn generations of work on macroeconomics.

    Forget about going back for the Ph.D. Steve, make this case systematically, and you’ll be in line for a Nobel Prize in Economics!

    But, no it isn’t about systematic anything… it is about ideological blinders.

    Hint… you can admit the stimulus did indeed stimulate the economy and yet argue it was a bad idea because it added to the deficit, cost-ineffective, or something else. But arguing it had no impact on employment or aggregate demand is just in wing-nut territory.

  5. Drew says:

    Would you care to cite the definitive work on the multiplier, Bernard?

  6. c.red says:

    Uhm, so 50 people from some business organization said that the stimulus didn’t affect their business and this is authoritative?

    I’m glad that has been settled. I guess the other eighteen were probably pinko commies…

    Off topic – odograph has always been one of the more reasonable/reasoning voices on this site. Even when I disagree with his opinion it has always been worth reading, same with Steve Plunk and several others at this site. Equating john personna with odograph, whether true or not, is not much of an insult.

  7. Michael Reynolds says:

    Since the stimulus included tax cuts I assume this proves that tax cuts don’t stimulate the economy.

    Glad we could settle that.

    But seriously, if you can’t trust a poll of guys who draw their paychecks from big business who can you trust?

    I’m seeing Help Wanted signs at coffee shops. There’s my anecdotal counter to Drew’s anecdotal evidence. If we need more people in Orange County, CA to pour $5 cups of coffee, things are getting better.

    Not that anyone might conceivably have spent their stimulus tax cuts on coffee. Because that could never happen. Everyone I know just burned that money.

  8. john personna says:

    If we are arguably in a second contraction, that might support the storyline that the stimulus had an effect, now waning.

    But really, that’s the beautiful thing about economics. You can make up any plausible storyline you like, and you can find some politically aligned economists to support it.

    Econ is not so robust they people of left and right can look at the same numbers and say together “yup, that’s it.”

  9. Steve Verdon says:

    Ahhh Bernard, maybe you should trundle on over to the Glittering Eye and read some of the comments I’ve left there.

    What other evidence are you referring too? The estimates that the stimulus is working?

    This is pretty amazing stuff actually. If you can show that $787 billion in additional deficit spending had no impact on the economy, you’d be in a position to overturn generations of work on macroeconomics.

    Really? You mean that for the last 20 years Monetary economics actually held that fiscal policy worked? Really? [Hint, the italicized part there is key]

    But, no it isn’t about systematic anything… it is about ideological blinders.

    Like the pretty ones you have on Bernard?

    Hint… you can admit the stimulus did indeed stimulate the economy and yet argue it was a bad idea because it added to the deficit, cost-ineffective, or something else. But arguing it had no impact on employment or aggregate demand is just in wing-nut territory.

    I didn’t make any such argument, I merely linked to an article that had a survey indicating that the stimulus has had much impact.

    c.red,

    Uhm, so 50 people from some business organization said that the stimulus didn’t affect their business and this is authoritative?

    Totally and absolutely and completely it is authoritative.

  10. john personna says:

    Totally and absolutely and completely it is authoritative.

    Heh.

    No doubt we’ll be reading Krugman’s capitulation tomorrow morning, and his endorsement of this absolutely and completely authoritative report

  11. Michael Reynolds says:

    Econ is not so robust they people of left and right can look at the same numbers and say together “yup, that’s it.”

    That’s a very elegant way of calling something bullshit.

    My rule of thumb is that any science that is regularly identified by a political modifier isn’t really science.

    Conservative physics. Liberal astronomy. Libertarian biology. Whig mathematics. Communist geology.

    Once you can attach a political label to something you’re not in science anymore.

  12. PD Shaw says:

    michael, the devil is in the details. The tax stimulus was as I recall $400 per person. Senior citizens got a check for the amount. I believe most people got a reduction in their withholding, which for a weekly paycheck would have been $7.69 per week, probably not enough to make-up for increased healthcare costs. People like me that are self-employed didn’t find out about it until around April 15 when we do our taxes and then we applied the amount to our next quarterly estimated tax. As far as I can tell, the tax cuts mostly stimulated people not aroused by such things.

    Had the feds just written everybody a check instead of these indirect stimuli, the dynamic would have been different. Some would have used the payment to get their debts under control, which I see as a long-term strain on consumer spending. Others would have used the found-money to buy a product they’ve been waiting for. Others would have invested. I would argue each one of these outcomes is better than what we got.

  13. Steve Verdon says:

    No doubt we’ll be reading Krugman’s capitulation tomorrow morning, and his endorsement of this absolutely and completely authoritative report

    Sir, I politely suggest that you have fallen for a troll.

    Sheesh.

    My rule of thumb is that any science that is regularly identified by a political modifier isn’t really science.

    Like the science of global warming or evolution? We can pretty much tell where people line up in terms of politics by what position they take on those two topics.

    Once you can attach a political label to something you’re not in science anymore.

    So science is above politics, personal biases, etc.? I actually think that the exact opposite is true. Even in something like physics people are going to have their own personal beliefs somehow coming into play.

    Econ is not so robust they people of left and right can look at the same numbers and say together “yup, that’s it.”

    Depends on which numbers you are talking about, I’d say. Things like the stimulus helping, hurting or having no impact are hard to gauge. We don’t have a good way of measuring jobs saved. All we can do is look at jobs lost or gained. The estimates others have pointed to as proof that the stimulus is working really isn’t proof…they are estimates. Estimates based on assumptions and past economic data. If, however, there has been a fundamental change in the economy then those past economic data may not be as relevant and the estimates maybe quite a ways off.

  14. Steve Verdon says:

    I believe most people got a reduction in their withholding, which for a weekly paycheck would have been $7.69 per week, probably not enough to make-up for increased healthcare costs.

    Yes, and what is nice about that is that come April 15th the government wanted that money back too. If you weren’t watching and adjusting your withholdings accordingly you could be in for a bit of a shock depending on how much extra you got in your paycheck.

    So for about 12 months or so people maybe spent a bit more. Then, if they didn’t notice this change, they’d find either a smaller return than they expected or even that they owed. This could in turn result in a curtailing of expenditures for a period of time.

  15. c.red says:

    Totally and absolutely and completely it is authoritative.

    Heh.

    No doubt we’ll be reading Krugman’s capitulation tomorrow morning, and his endorsement of this absolutely and completely authoritative report

    You forgot the totally for that extra bite.

    Best line of the day, Steve, I don’t think I could raise the sarcasm quotient any higher. Can I be you when I grow up?

  16. john personna says:

    Sir, I politely suggest that you have fallen for a troll.

    I went for the “heh” and not the “really?” because I got that.

    Depends on which numbers you are talking about, I’d say. Things like the stimulus helping, hurting or having no impact are hard to gauge. We don’t have a good way of measuring jobs saved. All we can do is look at jobs lost or gained. The estimates others have pointed to as proof that the stimulus is working really isn’t proof…they are estimates. Estimates based on assumptions and past economic data. If, however, there has been a fundamental change in the economy then those past economic data may not be as relevant and the estimates maybe quite a ways off.

    I don’t believe in immaculate spending. I don’t think anyone can spend $787 billion without improving someone’s job picture.

    On the other hand, I’m skeptical of anyone’s attempt to quantify it. That includes the administration’s “created or saved” numbers, but is not limited to their guess.

  17. Michael Reynolds says:

    Like the science of global warming or evolution? We can pretty much tell where people line up in terms of politics by what position they take on those two topics.

    Actually, in the first instance, yes. Like many people I smell politics all over climate science now, and I discount accordingly.

    Evolution, no. There’s no liberal or conservative biology, there are biologists (using the term broadly to encompass the various sub-disciplines) and there are Bible thumpers.

  18. John Personna says:

    The thing about science is that it has clear rules about what constitutes a cheat. If you catch a cheat, he will loose standing, funding, and perhaps a whole career. That’s the way a lot of crime and punishment situations work.

    If someone catches a cheating accountant we don’t normally extrapolate it to the whole field. We don’t say “no one should keep ledgers!”

    The srange thing for me about the climate thing has been how many people treat science as some strange and foreign thing, probably all bad, because someone told them so.

    Weird, but I guess science got “outside” the world of the right. They don’t want “due process” for who is a cheat and who isn’t. It’s more like “don’t trust that voodoo(*) science.”

    * – AKA “evolutionist”

  19. Michael Reynolds says:

    Let’s see, now. How can I disguise this self-serving link as germane to the conversation? Hmmm . . . Wait, I’ve got it!

    What if economists had telekinesis. That would be really, um, cool.

    Right?

  20. c.red says:

    Perhaps I should have been more straight-forward and less snarky in my original post, it was not really my intention to troll. I have time constraints in commenting on these posts and I only do so on ones that I want clarification or feel I can add a point to.

    I would genuinely like to know why you feel that a poll of 68 people from this particular organization justifies a post title of the “The Stimulus Didn’t Help” and a lead sentence implying (though not specifically saying) 73% of all economists don’t believe it helped. Fifty people said it didn’t do anything, 18 people said it helped, it isn’t much of a data sampling any way you slice it. We also don’t know anything about these people other than they are associated with a particular business trade organization.

    I like that you provided the numbers and the links and I checked those out, but I don’t see anything that particularly supports your central point. Unless I missed it and your point is that all data is weak on what the stimulus did.

    I also truly do think the “Totally and absolutely and completely it is authoritative.” was a good line.

  21. steve says:
  22. G.A.Phillips says:

    Once you can attach a political label to something you’re not in science anymore

    HARRY, It’s good to know that have totally have renounced evolution,psychology,and global warming,embryonic stem sell research along with abortion and many other false sciences of the pluvial condensation of dictate warfare class. Welcome to the great awaking:)

  23. Drew… this isn’t an argument about the multiplier effect. Indeed, even if you assume the “multiplier” is a fraction, the stimulus would still have a positive effect on the economy, though it would not be cost effective — i.e. you’d get less than 787 billion of stimulus out of the 787 billion spent. That was my point about it being possible the stimulus both “worked” and was “cost ineffective.”

    But under standard macroeconomic modeling, saying the stimulus had no effect is hard to explain. At the very least, this is one of the extraordinary claims that require extraordinary evidence — which certainly has not been provided here.

    Steve… you’re welcome to ride the monetarism train to oblivion if you like, though I think the consensus in economic circles is that the model is increasingly under siege. But regardless, look, even under monetarist assumptions, all else equal additional deficit spending ought to have a stimulus effect. Now, yes, lots of complications. And yes, if you want to throw in lots of assumptions about short-term vs. long-term interest rates, efficient market hypotheses, discount rates, and so on, it is possible to construct a very complicated theoretical framework to explain why $787 billion in deficit spending might have no effect on aggregate demand. But that would require a ton of data to demonstrate… not a poll of business economists assessing solely their own companies! And in the absence of compelling data, Occam’s Razor suggests that the stimulus probably did have an effect.

    Also, I’ll note that if 73% saw no impact, but say 20% saw a positive effect and say only 7% say negative impacts, that could easily give you 3.5 million jobs if the same findings are accurate for the economy as a whole. Now, I don’t know the actual data because it is hidden behind a firewall. Have you seen the full survey?

  24. Drew says:

    Bernard –

    But it is an argument about the multiplier, at least in the short run, which is where we are today. To my knowledge, estimates range from Barro’s (.6 or .7) to Valerie Ramey’s 1.4. I’m sort of partial to my old Prof Kevin Murphy’s rendition, which got some play here and at Glittering Eye awhile back. And then there’s a bunch in between. So I know of no definitive evidence that it “worked,” and when you consider the costs associated, it seems ill advised.

    I think Robert Bell had the better point, and I concede that it would be difficult for a business owner to tell with precision whether the stimulus had an effect. But I think you would all be surprised at how much of a feel for the pulse of their customer base small business owners have.
    If you own, say, a pre-stressed concrete manufacturer that makes highway bridge spans, you pretty much know that monies let have helped you. If you make injection blow molded shampoo bottles its hard to see a linkage.

  25. Steve Verdon says:

    I would genuinely like to know why you feel that a poll of 68 people from this particular organization justifies a post title of the “The Stimulus Didn’t Help” and a lead sentence implying (though not specifically saying) 73% of all economists don’t believe it helped. Fifty people said it didn’t do anything, 18 people said it helped, it isn’t much of a data sampling any way you slice it. We also don’t know anything about these people other than they are associated with a particular business trade organization.

    I think it is an interesting story. Is it authoritative? Not by itself, no. However, the issue of the size of the fiscal multiplier has been and still is being debated. Some say it is less than one, some say it is close to one, others say it is larger than one. It is a difficult question to answer and for additional reasons macro-economists (to put a term to that branch of economics) consider fiscal policy at best a cumbersome and weak policy tool. Often it is too late–i.e. it may promote growth but at a point when the economy is already growing thus possibly leading to inflation. It is hard to direct towards those government programs that do have a good multiplier effect.

    Taking the last part an expanding consider programs like food stamps. It is consider to have a fairly high multiplier effect. But how much spending can we put into that program? Could we double it? Maybe. Would we see some good results? Maybe. Could we increase it 10x or 20x and see results that are 10x or 20x what we are seeing now? Probably not is my guess. For one thing there may not be enough people to qualify for the program to benefit from 10x or 20x increase in spending. Second, even if we do lower the criteria for the program many people who do go on it might not use all of the food stamps. There is only so much cheddar cheese one can buy and consume. So you have to find something else…something that might have a smaller multiplier. Then there is the political/public choice aspect to the problem. A firm lobbying for a chunk of the stimulus money and then getting it for political payback, but having a multiplier less than one.

    As a result many economists that focus on the economy as a whole gave up on fiscal policy about 20 – 25 years ago. They instead turned toward monetary policy and macro-economics became monetary economics. Only with the current crisis has there been more/renewed interest in fiscal policy as a solution to a recession.

    For example, macroeconomics at NBER is now part of the international finance program there and some of the papers there are cross listed with monetary economics.

    Bernard,

    Epic fail dude. Monetary economics is not monetarism.

  26. john personna says:

    I think the horrible thing about food stamps is what it hides about the economy and the society. As someone observed, food stamps are the new bread lines. Except, they are invisible bread lines.

    What is it, 14% of the population can be waiting in a bread line no one sees?

    Think about that image!

  27. Steve Verdon says:

    You’d rather they wait in line (waste time, which has a value even if it is leisure time) and suffer the public indignity (another loss of welfare) for what? That “we” can point and feel both shame as a society and thanks that we aren’t in that line as well? I personally am not a big fan of poverty porn, but hey, YMMV.

  28. john personna says:

    I was thinking of something else completely. As I’ve probably mentioned before it comes down to a few questions:

    1) If 13% (reviewed my source) of the population don’t need a handout, why are they getting it?

    2) If 13% of the population do need help just eating, what can we say about our wonderful market capitalism?

    2a) If they need it, what is the trend?

    2b) Is the trend cyclical or structural?

    I worry that calling it “porn” is pretty much trying to stuff it back under the carpet.

  29. john personna says:

    (BTW, I don’t think that visualizing bread lines necessarily makes real people wait in them.)

  30. Steve Verdon says:

    2) If 13% of the population do need help just eating, what can we say about our wonderful market capitalism?

    1. We don’t have market capitalism, more like corporatism these days.

    2. Market capitalism never said it would fed everyone. Hell, even communism has a pretty dismal record there.

    Expanding on 2, people make mistakes or errors. Having a safety net of some kind isn’t necessarily a bad thing. Problem is when the safety net becomes like fly paper and people have trouble getting out.

  31. Drew says:

    “Problem is when the safety net becomes like fly paper and people have trouble getting out.”

    Or when its offered like heroin in return for a vote….and people have trouble getting out.

  32. steve says:

    IHS, Moody’s and Macroeconomic Advisors, three of the biggest economic research firms think it worked. The Chin article to which I linked above shows that the economists surveyed by the left wing outfit, the WSJ, think it worked. Worked meaning it increased jobs by about 1.5-2 million and increased GDP. (Sorry cannot find original data)

    http://www.nytimes.com/2010/02/17/business/economy/17leonhardt.html

    From your linked article

    “About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act

    A precise reading of that statement does not mean the stimulus did not help. If the stimulus was directed the way one would expect, it would not directly help the majority of companies. Not a very useful article. A discussion on multipliers would be more interesting. I hope that we are gathering enough data to reach some better conclusions. Barro had big problems from collecting data during WWII, hardly a normal economy.

    Steve

  33. Drew says:

    steve –

    Barro wasn’t looking for a “normal” economy. He was attempting to do what any an analyst would do: find the conditions under which govt intervention would be most observable. This is always the problem. Separating variables.

  34. john personna says:

    Well that’s tradition! Faced with 13% on food stamps Drew and Steve reply with some good old 70’s vintage pat answers!

    No data on who these 2010 food stamp recipients actually are, how long they receive them, or even to confirm that they genuinely need them.

    (Nothing will contribute less to solving our problems than replaying set-pieces from our youth.)

  35. Michael says:

    Like the science of global warming or evolution? We can pretty much tell where people line up in terms of politics by what position they take on those two topics.

    Wow. Just, wow.

    Do us all a favor, Steve, and stick to economics blogging. Leave the science blogging to people who, frankly, know what science is.

  36. Duracomm says:

    Economists aren’t the only ones who think the stimulus did not work.

    WASHINGTON — As if the White House isn’t already hearing it from others, the nation’s mayors delivered a clear message to President Barack Obama on Thursday: His economic stimulus program isn’t creating enough jobs.

    About 80 percent of stimulus money has gone directly to state governments, they say.

    Instead of being used to create new jobs, the bulk of the money has been used to save existing state government jobs … and for shoring up sagging state budgets.

  37. john personna says:

    There have been some who argued that was a better use for the money, Duracomm. States cannot deficit spend, and in a recession their commitments go up. They run many of the “safety net” programs that are suddenly catching more unemployed (or even homeless) people.

    If the federal government doesn’t cover them, who will? Raise taxes? In a recession? I think Oregon did that, but not many are taking that path.

    Maintaining the safety net is going to have an impact as stimulus, both because people won’t fall further, and because they will be spending more. How much? We are back to guesses.

  38. Drew says:

    “Do us all a favor, Steve, and stick to economics blogging. Leave the science blogging to people who, frankly, know what science is.”

    You bet, like data manipulation.

  39. Steve Verdon says:

    No data on who these 2010 food stamp recipients actually are, how long they receive them, or even to confirm that they genuinely need them.

    Well that is a nice lie. I don’t believe I said they didn’t need them, nor was the statement, by you, that I was replying too in need of data. Stop being a total moron just to score a cheap point.

    Wow. Just, wow.

    Do us all a favor, Steve, and stick to economics blogging. Leave the science blogging to people who, frankly, know what science is.

    And another complete moron checking in. How about this bonehead, I’m almost surely on the same side of the above two issues as you. On the first one we may have policy differences in how to handle it, but that is another issue, IMO.

    There have been some who argued that was a better use for the money, Duracomm. States cannot deficit spend, and in a recession their commitments go up. They run many of the “safety net” programs that are suddenly catching more unemployed (or even homeless) people.

    Problem with this cute little narrative is that it ignores the fiscal irresponsibility of states. Instead of saying, “Hmmm alot of us have balanced budget requriements, so we’d better save for the lean years,” they spend like crackwhore on a crack attack. Then there are the defined benefits programs many states have put in place as well which are going to be devastating to many state budgets.

  40. Michael says:

    And another complete moron checking in. How about this bonehead, I’m almost surely on the same side of the above two issues as you. On the first one we may have policy differences in how to handle it, but that is another issue, IMO.

    Be that as it may, your classification of those two fields of science as something who’s conclusions are determined by the political opinion of the person making them, is completely dishonest.

  41. john personna says:

    No data on who these 2010 food stamp recipients actually are, how long they receive them, or even to confirm that they genuinely need them.

    Well that is a nice lie. I don’t believe I said they didn’t need them, nor was the statement, by you, that I was replying too in need of data. Stop being a total moron just to score a cheap point.

    Looking for something to bristle at? No, I’m saying I am not so sure about who needs them. I mean, you and Drew would probably be on board with me that governments often overspend, and that an initially well targeted program may build a broader distribution over time.

    That’s why I described it as two sides of a coin, with my q1 and q2 above. Either their are too many truly poor, or too many are getting them.

    Now, directly responding to something you did say:

    2) If 13% of the population do need help just eating, what can we say about our wonderful market capitalism?

    1. We don’t have market capitalism, more like corporatism these days.

    2. Market capitalism never said it would fed everyone. Hell, even communism has a pretty dismal record there.

    Answer 2 is a little cute. When we teach the dynamic benefits of the markets in our schools, how many do we imply will starve?

    Next,

    There have been some who argued that was a better use for the money, Duracomm. States cannot deficit spend, and in a recession their commitments go up. They run many of the “safety net” programs that are suddenly catching more unemployed (or even homeless) people.

    Problem with this cute little narrative is that it ignores the fiscal irresponsibility of states. Instead of saying, “Hmmm alot of us have balanced budget requriements, so we’d better save for the lean years,” they spend like crackwhore on a crack attack. Then there are the defined benefits programs many states have put in place as well which are going to be devastating to many state budgets.

    I’ve chosen to emphasize overspending by states myself, in the past. I like firefighters, but I don’t like them making $250K per year, even as they limit new hires and maximize overtime.

    What though, you think a rant about that suddenly balances the states’ books? States don’t need federal money because they are bankrupt for (partly) the wrong reasons?

  42. Drew: Look, even if the multiplier was .5, the stimulus would still be stimulating, since it was deficit spending.

    It can be bad policy and still “help” in the short-run. I don’t see why you can’t concede that point. It almost certainly created jobs and economic activity that would not have occurred otherwise, but indeed, may not be worth it. I don’t actually have a strong view on that either way.

    Steve: Monetarism is a school of thought within monetary economics, one which I assumed you were signing on for since it actually has some concrete policy recommendations/implications associated with it. You are correct that monetary economics refers to a more general research program. Okay… what is your point then? In this context, I sort of assumed you were going to argue that the major dynamic was related to money supply and interest rates. Is that not right?

    Why speak in epigrams? What insight from monetary economics would you like to point me to? I never understand why it is so hard to pin you down on anything.

  43. Steve Verdon says:

    Bernard,

    I was referring to monetary economics with emphasis on the first term in that many researchers who look at economy wide policy generally looked at monetary policy vs. fiscal policy. The latter being seen as problematic relative to the first.