BBerg - On Tobin's current relevance: “It’s not part of what anybody has taught graduate students since the 1960s,” Cochrane said. “They are fairy tales that have been proved false. It is very comforting in times of stress to go back to the fairy tales we heard as children but it doesn’t make them less false.” To borrow money to pay for the spending, the government will issue bonds, which means investors will be buying U.S. Treasuries instead of investing in equities or products, negating the stimulative effect, Cochrane said. It also will do nothing to unlock frozen credit, he said. -How does this argument hold up when most of the purchases of USTs are by foreigners (which seems to me to be the actual truth)? Does this crowding-out argument make sense in the multinational framework?
TimDuy - When will the Fed move to overtly inflationary policies? "For Bernanke and Geithner, there are no bad assets. Only misunderstood assets."
Krugman - the problem with the neoclassicals: "The other group decided that since they couldn’t come up with a rigorous microfoundation for price stickiness, there must not be any price stickiness: recessions are the result of adverse technological shocks, not demand shocks"
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