Investment, Summers-DeLong, and the Old Paradigm

[michael at ecst.csuchico.edu]

The Summers-Delong paper does argue that investment is key to growth,
although growth may spur investment in a reverse causality.  Their data is
historical.  Today's investment,as Doug says, is very different.

This difference gives rise to the New Paradigm, of which we have expressed
considerable scepticism.

We are in uncharted territory, in part, because of the shift of our
manaufacturing base abroad, as part of globization, of which much
scepticism has been expressed.

We are in unchartered waters.  We are correct to be sceptical about the
New Paradigm and globalization, yet something important is afoot.  Much
work to do -- at least in theory.

 -- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu