Monday, February 07, 2011

Bryan Caplan gently swats Tyler Cowen

In Tyler's case, unfortunately, it's hard to get a bet on the table. Not only does he deny his duty to bet on his beliefs. There's also a major disconnect between his big picture rhetoric about the Great Stagnation - where I know we disagree - and his specific claims about the facts - where I'd need to spend a month crunching the numbers to weigh in. Until I get a spare month, all I can say is that even if Tyler's right, he's wrong.

Hell must be going through some strange cooling period.

UPDATE: More spanks from Steve Miller:
In a sense it would be nice for us, the free-marketers, if we could make the case that growth in government spending has led to stagnation. But it hasn't, because there is no stagnation. Whether that's because of or despite of growth in government is a separate issue. The stagnation hypothesis ONLY fits the income data. It does not the purchasing power (in labor hours) data, not at all. It doesn't fit with the economists' standard of greater choices, either. In the 1980s Robin Williams' character in Moscow on the Hudson collapsed in a small grocery store because he was overwhelmed by the coffee selection. What has happened to those choices since the 1980s?

UPDATE: Arnold Kling's smell test:
I personally do not think that the stagnation hypothesis can survive the thought experiment in which you offer somebody the choice between (a) today's median income and today's array of goods, services, and prices or (b) 1973's median income (plus, say 25 percent) and 1973's array of goods, services and prices. I think that so many people would reject the 1973 option that the stagnation hypothesis becomes untenable.

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