New Old Keynesianism

by John Quiggin on January 22, 2014

The term “New Old Keynesian” was coined by Tyler Cowen a couple of years ago, to describe the revival of the view that the Keynesian analysis of recessions caused by lack of aggregate demand is relevant, not only in the short run (in this context, the time taken for wage contracts to reset, say 2-3 years) but in the long run (5 years or more) as well. When Cowen was writing, in September 2011, the New Depression could still, just about, be seen as a short run phenomenon[1]. In particular, the anti-Keynesian advocates of austerity in the US, UK and Europe were predicting rapid recovery.

As 2014 begins, it’s clear enough that any theory in which mass unemployment or (in the US case) withdrawal from the labour force can only occur in the short run is inconsistent with the evidence. Given that unions are weaker than they have been for a century or so, and that severe cuts to social welfare benefits have been imposed in most countries, the traditional rightwing explanation that labour market inflexibility [arising from minimum wage laws or unions], is the cause of unemployment, appeals only to ideologues (who are, unfortunately, plentiful).

So, on the face of it, Cowen’s “New Old Keynesianism” looks pretty appealing. But what are the alternatives? Leaving aside anti-Keynesian views for the moment, the terminology suggests four logical possibilities: Old Old Keynesianism, Old New Keynesianism, New Old Keynesianism and New New Keynesianism.

But do these logical possibilities correspond to actual viewpoints, and, if so, whose?

[click to continue…]

Please Go Away Mao, You Are Banned As Well

by Belle Waring on January 22, 2014

Dearest Mao Cheng Ji,
We are the staff and posting priveliges of Crooked Timber.org webmagazine. We have been recommended to you as a person of trustworthiness for any trolling enterprise. At the moment we have over 5,893,903 (five million, eight-hundred-and-ninety-three-thousand, nine-hundrend-and-three) US comments waiting in the spam queue of a blog that was formed by Hector St. Clare, until recently the most acclaimed and five-times elected troll of our blog. However, his blog has been shut down for some time while he has been in exile from his native land, and for this reason we have no way to access our comments, as we all lack passports because or paperworks problems due to our initial blog-formation not being intended to be a group blog. Our blog was expanded to have more members of the board but the requisite letters of incorporation are awaiting approval and must be approved in many countries at the same time if we are to regain bloggging passports. So we have contacted you to ask you to move to Hector St. Clare’s blog permanently in the hopes that as soon as he re-continues his blog we will be able to access our 5,893,903 US comments currently waiting in the queue. We will need you to assist us in this enterprise by commenting their a small amount to cover the transfer fees but we will be happy to repay you for this service with 20% of the comments 1,178,780 US comments. Thanks be to God, we are all very excited at the prospect of you commenting permanently at Hector’s blog, and never commenting here at Crooked Timber again, under any circumstances, even needing to use a false name. I speak for all of us in saying we were lucky to of been given the chance to use your help to get our comments back from Hector’s blog. We may be contacting you with more details about the 5,893,903 comments.

For real, no. Hector was a substantially better feminist than Mao when it came to recognizing that gendered threats of violence are a special case, worth considering as different from generalized internet threats, for reasons other than ‘prudishness’–namely they are an attempt to drive women out of public fora.