Investment, Summers-DeLong, and the Old Paradigm

[Brad De Long]

>> 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.
>
>If memory serves,
>Jane Gravelle, of whom I think a lot, says if
>you jiggle their data a little the results
>fall apart,e.g., that they rest on a few itty-
>bitty third world countries. (forgot which
>ones)
>
>MBS

Naaah...

It's pretty robust (not perfectly: if you put in continent dummies *and*
are careful to exclude poor countries, you can make the correlation go
away). In fact, according to Xavier Sala-i-Martin, it is the most strongly
correlated thing around...

Brad

"Now 'in the long run' this [way of

 summarizing the quantity theory of   | <delong at econ.berkeley.edu>
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