Comments on: Who You Gonna Believe – Me or Your Lyin’ Eyes?

By: pedro

pedro — Mon, 02 Aug 2010 07:11:29 +0000

I don’t think we’ll solve the recession by inventing ipads, but this is nicely put:

“Current experience is also consistent with (but not unambiguously favoring) an Austrian-like view that the stimulus boosts some activity and then shortly thereafter pulls away the rug, leaving us more or less back where we started, albeit with some smoothing gains in the short run and some adjustment costs in the longer run. The persistence and scale-up from the initial fiscal boost is hardly guaranteed. The empirical papers on multipliers are not to be trusted and the results are in any case hard to generalize from one period to another.

Harald Uhlig’s paper is one statement of the case against stimulus. There is nothing measured by the Alan Blinder study which rules out the central result of this paper, namely transitory gains in the short run and high costs in the longer run.”

http://www.marginalrevolution.com/marginalrevolution/2010/07/blunt-opinions-supported-elsewhere-but-not-here.html#comments

By: entropy

entropy — Fri, 30 Jul 2010 11:26:45 +0000

There is definitely some truth in what you say, Pedro, but the point of the Apple example (and S&W?) is that even in a fearful climate, if you produce products that people desire, they will buy. it is not as though there was this huge pent up demand for tablets: they have been around for a decade. It is just that nobody wanted one until Apple made the iPad.

I am using the Apple example to demonstrate that Says Law is correct, and Keynsian stimulus does little else but artificially put the reckoning off for a bit.

By: pedro

pedro — Fri, 30 Jul 2010 11:11:01 +0000

Everything in moderation I say.

By: Infidel Tiger

Infidel Tiger — Fri, 30 Jul 2010 10:48:54 +0000

No doubt, Pedro. I fear a Keynsian being in charge everytime a recession is upon us.

By: pedro

pedro — Fri, 30 Jul 2010 10:15:14 +0000

I think that the old keynsian message is crap, but it is plain denialism to think that recessions are not made worse by fear.

By: Infidel Tiger

Infidel Tiger — Fri, 30 Jul 2010 08:10:01 +0000

Nor Smith & Wesson.

By: Entropy

Entropy — Fri, 30 Jul 2010 08:08:54 +0000

In an exchange economy, people producing what others do not want to buy is the cause of unemployment and a flat economy.

Even in America, it is pretty obvious that Apple Inc is not suffering any recession.