The Growth of Government notes
Application #1: The Growth of Government (Higgs)
How would Wittman explain the growth of governmentin
the U.S. in the 20th century?
How would I explain it?
Higgs partly succumbs to the fallacy of treatingsocial
Determinate Reserve Ratio notes
The Determinate Reserve Ratio
Helpful approach: think of bank's demand for reserves as
a derived demand.
Two reasons a bank needs base money.
Customers' net deposits of base money.
Long Run Neutrality notes
The AS Puzzle: Whatever Happened to Long-Run Neutrality?
Monetary forces explain the severity of the nominal decline,
but it seems necessary to look at labor market policies and
other interventions to explain why the real reac
Monetary Explanation Proposed notes
The Monetary Explanation Proposed: The Classic Case of Friedman and
As Bernanke points out, the Great Depression can be seen
as two puzzles:
The AD puzzle:
Why did AD suddenly fall?
The AS puzzle:
Monetary Interpretation Confirmed notes
The Monetary Interpretation Confirmed: The International Evidence of
Eichengreen and Bernanke
M1/Base is the money multiplier.
European Unemployment and Real Rigidities notes
European Unemployment and Real Rigidities
Eichengreen and Bernanke note that France was an
outlier in the Great Depression: even after France adopted
expansionary monetary policy in 1936, it seemed unable
Why Some Countries are Rich and Some are Poor notes
Why Some Countries are Rich and Others are Poor
In a democracy, the more a country's electoratebelieves in
the benefits of inefficient policies, the poorer that country
E.g. Europe vs. the
How to Think Like Wittman
Principle #1: Voter ignorance is not a serious problem.
Voters can simply ask their preferred experts for information,
and they appropriately discount biased information.(Moreover,
asymmetric info makes governmen
The Logic of Collective Belief notes
Why #2 is Right: The Logic of Collective Belief
Wittman's arguments about political competition
andtransactions costs seem compelling to me.
But: Empirically, the evidence for voter stupidity(i.e.,
Arguments against Obvious Explanation notes
Arguments Against the Obvious Explanation
Most of the interventions existed for at least a decade before
they had any observable impact. During the '70's European
unemployment was lower than that in the U.S.