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Tuesday, February 23, 2016

Is 5% Growth Possible?

I have a new column:

Here’s Why Bernie Sanders’ 5% Growth Plan Isn’t Crazy After All: Controversy erupted last week when University of Massachusetts Professor Gerald Friedman produced estimates showing that under the Sander’s economic plan, “The growth rate of the real gross domestic product will rise from 2.1 percent per annum to 5.3 percent so that real GDP per capita will be over $20,000 higher in 2026 than is projected under the current policy.” The reaction from critics is exemplified by a letter from four former heads of the Council of Economic Advisors under Democratic presidents, Alan Krueger, Austan Goolsbee, Christina Romer, and Laura D’Andrea Tyson:
“As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic.”
Defenders such as Jamie Galbraith, an economist at the University of Texas, argued that there is nothing “magical” or outlandish about the estimates, Professor Friedman used a defensible model to obtain his results:
“What the Friedman paper shows, is that under conventional assumptions, the projected impact of Senator Sanders' proposals stems from their scale and ambition.
When you dare to do big things, big results should be expected. The Sanders program is big, and when you run it through a standard model, you get a big result.”
Is it possible for the economy to reach such a high rate of economic growth? ...

Not a big fan of the title they gave this -- I didn't address the specifics of Sander's economic program.

    Posted by on Tuesday, February 23, 2016 at 08:09 AM in Economics, Politics | Permalink  Comments (267)


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