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Saturday, May 23, 2015

Surprise!

How the world has surprised Brad DeLong:

Four Ways in Which the World Has Surprised Me Over the Past Decade with Its Economics: A good day yesterday at the University of California center in Sacramento...

I started out saying: I find my peers, as they age, become increasingly unwilling to mark their beliefs to market. .... So let me ... spend my time this lunchtime detailing four points in economics at which the world has surprised me over the past decade, and in which as a result reality has led me to shift my beliefs.

In brief:

  • The world has turned out to be more Keynesian than I would have imagined a decade ago.
  • Low-tax, low-service U.S. state level political economy has proved to be ineffective as an economic development model. I was always pretty sure that it was a lousy bet from the standpoint of societal welfare. But a decade ago I thought it at least boosted state-level GDP. Now I do not.
  • The success of the implementation of Obamacare has raised my estimation of the administrative competence of the government.
  • And the aggregate economic costs to America of local NIMBYism now appear to me to be much larger than I would have thought reasonable decade ago: we are no longer a country in which people can afford to move to places where they will be more productive and more highly paid because high-productivity places refuse to upgrade their residential density.

All this, I said, has powerful political consequences. And the politics of the last decade has also been very surprising to me. But I did not have time to get into that in any depth…

The biggest surprise for me, and perhaps it shouldn't have been, is the degree to which politicians are willing to put political interests ahead of helping people in need. Watching the political/policy reaction to the Great Recession was both disappointing and eye opening.

    Posted by on Saturday, May 23, 2015 at 09:41 AM in Economics | Permalink  Comments (158)


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