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Monday, August 29, 2005


Edward Hugh

"government spending in "ordinary" times"

Well this would be just my beef, both with the Keynesian and the RBC models, "ordinary times" smacks to me of a Weberian 'ideal type'. The problem is there may be no such thing. Every situation, like every unhappy family (Tolstoy) may be different in its own way on each and every occassion. I'm not saying there aren't trends (or even 'evolution') what I'm saying, I suppose, is that these classes of models don't seem to allow for them.

"those that focus on "extraordinary" fiscal episodes"

Like the post Maastricht SGP in the eurozone, where the strict limits and requirements to reduce the volume of debt as a proportion of GDP are to avoid precisely those explosive debt dynamics you mention. The question is, is demographic ageing an 'exceptional event' or does it form part of the natural order of things? Put this another way, should these changes be treated endogenously or exogenously in the models? If they were 'internalised' it would add a whole new level of realism to the debate about fiscal policy.

One last thing on Tolstoy: you know I don't think somehow that he believed in 'happy families'. Which means that all 'happy families' for T are the same for a very simple reason: they are inexistent. Which makes it kind of funny that this is one of the most widely used quotes in economic papers :).

Asics Tiger

I agree with you ,your saying is very good!

Cheap Bikinis

Good article.I will continue to focus on.

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