Wednesday, July 20, 2011

Yes, Krugman this is a flaw

That’s exactly what Cantor is saying. It’s completely wrong; the whole point is that stimulus is supposed to put resources that would otherwise be unemployed to work. But at this point, a large part of the economics profession no longer understands that. So why should we expect politicians to get it? Brad going over the indefiite Keynes debate

The problem is what are unused resources. Either we treat unused resources as a smooth distribution or as a histogram with one chunk idled. Where Keynes cheated is that he uses smooth distribution in the math but sparse distributions in the assumption. He claims we have a redundancy problem then shows that infinite dimensional math can find an intermediate solution.

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