G11 - Week 15 - Day 2

In-class work

1. Brief review
2. Ch. 11-12 assessment

From the blogosphere

1.  Should-Read: To paraphrase Rawls: Nobody deserves the benefits that flow because their native endowments and luck have ...
   

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Currently Reading

Debt: The First 5,000 Years

and

Bourgeois Equality

G11 - Week 15 - Day 1

In-class work

1. Ch. 11-12 review
2. Share news articles

From the blogosphere

1. 
   

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Currently Reading

Debt: The First 5,000 Years

and

Bourgeois Equality

G11 - Week 14 - Day 2

In-class work

1. Exercise 1 (p. 273)
2. An Introduction to Aggregate Supply

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From the blogosphere

1. Which kind of countercyclical fiscal policy is best?
2. "a very interesting paper"
1. "The figure shows considerable variation over time, establishing that the state of the economy is crucial for the effectiveness of fiscal policy response.32 Multipliers rise considerably during the financial crisis, and tend to be low during other periods. Interestingly, the purchases multipliers is the most stable, and smaller than one. It only rises modestly around the Lehman event, and falls sharply during 2009 (precisely when the ARRA is implemented). The transfer multiplier is typically lower than the purchases multiplier, and is even negative during some periods of expansion. It rises considerably, above 1.5, during the financial crisis, which is consistent with the large role of transfers for stabilization. Bank recapitalizations also have fiscal multipliers that are typically negative but rise considerably during the crisis, going over 2. These facts provide further evidence on the stabilizing role of these two fiscal policy tools during the financial crisis. Interestingly, and unlike government purchases, these effects are extremely state dependent as these two tools have the potential to generate negative multipliers if used during periods of expansion." (p. 47-48)
3. Confusions about the multiplier < 1 (me defending
4. Mobilizing Real Resources

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Currently Reading

Debt: The First 5,000 Years

and

Bourgeois Equality

G11 - Week 13 - Day 1

In-class work

1. News article sharing and discussion
2. Exercises 4-7 p. 241
3. Exercises 9-12 p. 252-3
4. Measuring the Macroeconomic Objectives: Economic Growth, Unemployment and Inflation
5. An Introduction to Aggregate Demand
6. An Introduction to Aggregate Supply

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From the blogosphere

1. Demographics of U.S. Working Class

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Currently Reading

Debt: The First 5,000 Years

and

Bourgeois Equality

A Series of Interesting Posts over at Marginal Revolution

Below are a series of links to posts from George Mason University economist Tyler Cowen at Marginal Revolution. The first two were posted yesterday and today respectively. The third is a link from the blog posts by Cowen providing "evidence" of the effectiveness of being a miser. All of these posts discuss a recent gift of $400 million to Harvard University by a wealthy donor.

Did the Wisconsin state system just abolish tenure?

A tweet in the form of a blog post, with an addendum, #Paulson, #Harvard

What I Like About Scrooge

It seems to me that author is confusing miserliness defined as "excessive desire to save money; extreme meanness" with asceticism, which is defined as "severe self-discipline and avoiding of all forms of indulgence, typically for religious reasons."

In any instance, the entire debate seems to hinge around the marginal benefit supplied by Harvard receiving an additional $400 million on top of its already huge endowment of $36 billion. I'd imagine the marginal benefit is quite small, which implies the opportunity cost of this donation is quite large as $400 million is capable of having dramatic impact when given to another organization whose marginal benefit would be quite higher.

Even excluding the moral weight a decision like this carries, we can look at the marginal propensity to consume (MPC) of various economic classes to decide this isn't the best use of $400 million from an economic standpoint. Harvard essentially serves the most elite of the economic world. The wealthy have a lower MPC than the poor and so a gift of this magnitude would have a larger economic effect on growth by ensuring it gets into the hands of the poor instead of the elite.