Re: Re: Re: AS/AD

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 05:14 PM 8/29/00 -0400, you wrote:
>  usually this Say's Law argument [i.e., that saving promotes investment]
> is dragged in for the long run analysis.  But, the new wave led
> by the execrable Mankiw (...) is to place this huge emphasis on long run
> growth.

In the NATION magazine, there's an article by William Greider on Al Gore's
vision of fiscal policy, which involves "paying down the national (sic)
debt," i.e., running continual surpluses, ignoring the fiscal drag or worse
that results. Greider presents a list of economists who endorse this
Coolidgean philosophy, including the powerful Larry Summers and (Krugman's
nemesis) Laura Tyson. All of this is predicated on either the "saving
promotes investment" version of Say's Law or the faith that Alan Greenspan
will always and everywhere steer the US economy to stay at the "natural
level of output" (a.k.a. the potential or full-employment level of real GDP).

Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine