Re: Re: Re: Re: Re: Re: the downturn

[Brad DeLong <delong@xxxxxxxxxxxxxxxxx>]

> At 01:32 PM 12/4/00 -0500, you wrote:
> > Jim,
> >       Let's keep in mind that there is a crucial
> > difference between a "slowdown" (reduction
> > in the rate of still positive growth) and a "recession,"
> > actual negative growth.  One of the reasons why
> > those downturns go fast once they start is for the
> > oldest of Keynesian reasons, one rapidly being
> > purged from the new wave textbooks following
> > Mankiw, the multiplier effect.
>
> perhaps more importantly, they've purged the accelerator effect and
> the debt-deflation theory of great depressions.

We have? Even Mankiw (Intermediate) has a version of debt-deflation
(although I find his discussion hard to follow) focusing on the real
interest rate...


Brad DeLong