>
> On Nov 18, 2006, at 3:31 PM, tfast wrote:
>
> > Here is Delong Defence,
> >
> >
> > But even as Monetarism subspecies four was failing its empirical
> > test, large
> > elements of Monetarism subspecies three-Classic Monetarism-were
> > achieving
> > their intellectual hegemony. For under normal circumstances
> > monetary policy
> > is a more potent and useful tool for stabilization than it fiscal
> > policy.
> > The frictions that give slope to the expectational aggregate supply
> > curve
> > are key causes of business cycle fluctuations. The natural rate
> > hypothesis
> > has strong empirical support, and does mean that fluctuations are best
> > analyzed as being about trend rather than being beneath potential.
> > It is
> > better to analyze macroeconomic policy by considering the long-run
> > implications of rules. And any sound view of stabilization policy must
> > recognize how limited are its possibilities for success.
> >
> > These insights survive, albeit under a different name than
> > "Monetarism."
> > Perhaps the extent to which they are simply part of the air that
> > modern
> > macroeconomists today believe is a good index of their intellectual
> > hegemony.
> >
>
> What the fuck does all this amount to? A skepticism about fine-
> tuning? An appreciation of the limits to fiscal stimulus? For this we
> needed Milton Friedman?
>
> Doug
>
My personal favorite is the claim that "the natural rate hypothesis has
strong empirical support." It damn well should given it is defined as
close to whatever the existing rate of unemployment happens to be.
Travis