Thursday, October 7, 2010

out of laziness i steal content

From Krugman:
What’s striking about the you’re-so-ignorant critics, however, is their tendency to get all confused about very basic things – to insist that the savings-investment identity somehow implies that government spending can’t increase demand, that the Euler condition is somehow a causal relationship implying that low interest rates cause deflation, that Ricardian equivalence means that even a temporary rise in government spending will be fully offset by reduced consumption.

I believe that what we’re looking at is people who know their math, but don’t know what it means: they can grind through the equations of their models, but don’t have any feel for what the equations really imply.

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