Paul says we have a better equilibrium on the unemployment-inflation trade off, but short term restrictions on inputs means we cannot plot a path. My short hand summary.
That brings up a question. Why did we bailout state budgets with the stimulus? If we are Keynesian, then we must believe there is a better equilibrium with stronger state and local governments, relative to central government. OK, so far so good.
Then why are local government jobs reducing relative to federal jobs after the stimulus? Something needs explaining in the Obama plan.
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