tag:blogger.com,1999:blog-6245381193993153721.post2707609105879059009..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: US GNP Estimates in the Recession of the 1890sLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6245381193993153721.post-91804630294725909952011-01-21T18:09:13.184-08:002011-01-21T18:09:13.184-08:00"The debt deflation theory of Fisher may have...<i>"The debt deflation theory of Fisher may have been the most convincing writing on business cycles in my recent memory..."</i><br /><br />Indeed it is. But remember research has proceeded well beyond Fisher's original article, with very important work by Hyman Minksy and more recently by Steve Keen on his debt deflation blog:<br /><br />http://www.debtdeflation.com/blogs/Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-47212160458785153142011-01-21T09:04:36.832-08:002011-01-21T09:04:36.832-08:00Austrian? I am not here as an informal representat...Austrian? I am not here as an informal representative of any school of thought. I am young and in my formative years, so I could be a Chicagoite the next week, a protectionist mercantilist the week after, then a neoclassical, a post-Keynesian, and maybe even an outright socialist if I felt convinced by the logic. Lionel Robbins made such dramatic transformations as an expert, let alone as a layman.<br /> <br />Don't get me wrong, this blog is better researched than most (or perhaps nearly every) free market blogs one might see. I mean it. The debt deflation theory of Fisher may have been the most convincing writing on business cycles in my recent memory, and was on my mind for a week.<br /><br />My post was just the statistic-skeptic in me speaking, since I have seen the same statistics being used to interpret many different results by many different people. It's a knee jerk response for me to ask, everytime a statistic is cited, "so what".Prateek Sanjaynoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-88045696463552049282011-01-21T01:29:11.869-08:002011-01-21T01:29:11.869-08:00"So in that respect, would it really matter i...<i>"So in that respect, would it really matter if GNP did or did not increase by a certain amount?"</i><br /><br />You're saying: Does really matter if the nation's output falls and its wealth per capita and general living standard fall?<br />Does it matter if there is mass unemployment, starvation, homelessness, misery?<br /><br />Of course it does. And if that is what Austrians say under such circumstances, then it is no surprise Austrian economics is a fringe movement taken seriously by virtually no-one.<br /><br />The faliure to invest was not some "natural" outcome: it was caused by an asset bubble collapse, a financial crisis, banking panic, money supply collapse, debt deflation and collapse in aggregate demand.<br /><br />Business expectations were shocked, destroying confidence, for years on end.<br /><br /><i>I see you have established, correctly, that the 1890s showed low growth in GNP, but I want to know how that translates into an actual, physical, tangible, flesh-and-blood problem on a day to day basis.</i><br /><br />There was a steep fall in GDP from 1892 to 1893 and probably again in 1896.<br /><br />The Kuznets-Kendrick series shows a full-blown depression.<br /><br />Balke and Gordon show a severe recession.<br /><br />Romer’s estimates shows a mild to moderate <br />recession, but that finding is contradicted by the astonishingly high unemployment that persisted until 1899.<br /><br />It's no wonder you don't see Austrians try to use this recession as "proof" of self-correcting markets.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-71486606889340313852011-01-21T01:16:01.576-08:002011-01-21T01:16:01.576-08:00Some thoughts on this interesting piece.
A GNP fi...Some thoughts on this interesting piece.<br /><br />A GNP figure would include domestic investment, and domestic spending. If it so happens that a firm sits on its cash instead of investing it, it has merely decided to invest later rather than now or invest in something else. And if it so happens that consumers decided to save up money, especially if a natural disaster or a draught happened, then they have simply decided to spend in the future and not now.<br /><br />So in that respect, would it really matter if GNP did or did not increase by a certain amount? Wouldn't it simply have meant that firms are investing in the future rather than the present or consumers are spending in the future rather than the present? Either of those decisions will not increase or decrease the amount of capital a business has or the amount of consumption a person does across the next few years.<br /><br />I see you have established, correctly, that the 1890s showed low growth in GNP, but I want to know how that translates into an actual, physical, tangible, flesh-and-blood problem on a day to day basis. Because otherwise, low growth in GNP just tells us low growth in GNP.Prateek Sanjaynoreply@blogger.com