Posts Tagged ‘Economy’
4/14/09 — We’re all Hicksians Now
What we call “Keynesianism” or “Keynesian Economics” really owes more of a tip-of-the-hat to a fellow named John Hicks, who in 1937 wrote “Mr. Keynes and the Classics” which, in effect, put Keynes’ somewhat theoretical constructs, his General Theory, into more practical terms. Hicks followed up with his own classic textbook, Value and Capital, which should be must-reading for all advanced economics students.
I say should, but, sadly, it really isn’t. Even when it was prescribed by elderly professors, a whole generation of younger students tended to gloss over both Hicks and Keynes in favor of more “practical” economic topics. After all, who was going to write a dissertation on the IS-LM curve?
Now that we’re all “Keynesians” again (or more properly “Hicksians”), it’s helpful to go back to basics, and I’m specifically referring to that frequently discounted IS-LM curve. A few days ago, I was struck by how little I remembered about these things. With some chagrin, I started doing some research, and found out I’m not the only one — even the best economists in the world are starting to dust off old advanced macro texts and re-remember just how an economy is supposed to work. For a great and relatively brief exposition on this oft-abused topic, I’d refer you to some class notes written by Paul Krugman a few years ago when he was “stuck” by his department at MIT to teach a quarter of Macro Econ Theory to grad students and also had to dust off these concepts. Thanks to the internet, nothing you ever write (particularly if you’re a future Nobel Prize winner) is totally forgotten, and you can read it on-line here. For a little extra commentary, I’d refer you to a 2006 entry from Greg Mankiw’s blog here.
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4/6/09 — Back in the Office
Was in New Orleans and Baton Rouge last week. The Louisiana economy, which has never been wonderful, none-the-less seems to be handling the current recession better than most. Of course, the whole of the Gulf Coast is still recovering from the disasterous 2005 hurricane season that saw Katrina and Rita — both Category 3 storms at the time of landfall — hit the Louisiana coast within a month of each other. For a synopsis of the real estate research implications of these storms, see my 2007 Journal of Real Estate Literature article with Dr. Sofia Dermisi. You can also get a great synopsis of the economic impacts of these two storms from Louisiana State University’s Geographic Information Center.
According to LSU, about $25 Billion in Federal redevelopment funds have come into that state in the past 3 years, with the bulk of that flowing into the New Orleans area as a result of Katrina. Of course that doesn’t include substantial private settlements, such as the $330 milllion Murphy Oil settlement which Greenfield assisted in negotiating. The accounting for all of these pivate dollar flows will probably never be totalled.
Does that mean Louisiana has recovered from these disasters? Far from it. The state is still in economic turmoil, and current state budget cuts have the potential to eviscerate higher education, further increasing the “brain drain” that Governor Jindal pledged to stop in his campaign.
But, given where Louisiana was, economically, as of about a year ago, one would have expected that the recession would have simply shut down the economy there. Instead, there’s still a wonderful vibrancy in the state. Crops got planted this year, refineries are still in operation, and tourists still flock to the state. Anecdotal reports indicate that building construction has slowed, but not as badly as in some other parts of the country. Louisiana still has economic problems, and like the rest of the country, many of these problems are beyond their direct control. However, they seem to be slowly pulling themselves together.
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3/30/09 — It’s coming fast and furious now!
My normal weekly posting is quickly becomming daily, as a result of the rather rapid changes in the landscape. I’d recomment reading:
http://www.becker-posner-blog.com/archives/2009/03/the_governments.html
From the Becker-Posner blog. It’s — along with the commentary — is a great explanation of the issues surrounding the toxic assets plan. Good reading!
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3/29/09 — and two more things….
Two more very quick things….
First, the best description of the various Federal bail-out choices comes to us… no surprise, from the TV show Southpark:
http://www.southparkstudios.com/clips/222638
Second, this comes to me from Greg Mankiw’s excellent blog. Prof. Mankiw teaches introductory econ at Harvard and is the former chair of the President’s Council of Economic Advisors.
From a small northwestern observatory... 