Revising History

From Econ Journal Watch:

Paul Krugman Denies Having Concurred With an Administration Forecast: A Note
by David O. Cushman

Abstract

In a previous article for Econ Journal Watch, I attributed to Paul Krugman a concurrence with the optimistic economic forecast put forward in early 2009 by the incoming Administration. Krugman reacted by denying that he had concurred with that forecast, pointing to a blog entry of his from January 2009. But Krugman apparently did not read my paper. It concerned not a blog entry from January 2009 but rather one from March 2009. In this note, I take greater pains to show how Krugman’s March entry, made in support of Brad DeLong’s criticism of Greg Mankiw’s doubts about the Administration forecast, can be interpreted as having effectively concurred with that forecast. I conclude with discussion of the shortcomings of the model that DeLong put forward when making his Krugman-endorsed criticism of Mankiw’s doubts.

He didn't know the secret handshake

Some news from across the atlantic:

Fake Portuguese economist unmasked

And to some lighter news out of Portugal, where a fake economist duped the nation for months. Our correspondent Giles Tremlett reports:

Artur Baptista da Silva had become one of the most authoritative voices on Portuguese television, using his experience as an economist and United Nations consultant to explain why so much austerity was bad for the bailed-out country's economy.

But now it turns out that the 61-year-old economist who explained so seriously – and clearly – the damage being inflicted on the country by the austerity measures demanded by the troika of lenders (EU, IMF and ECB) was a conman with at least two jail terms behind him.

The fake economist earnestly debated with journalists and other experts on television shows, claiming that the European Union has become a farce.

Baptista da Silva became so popular that he was invited to talk to the socialist party's summer school and some of the country's most prestigious debating societies. He claimed to have been a professor at a now defunct US university and to have worked with the World Bank.

“He said what people wanted to hear,” explained Antonio Costa, editor of the Diario Economico newspaper. That may explain why fans have now launched Facebook groups supporting him, including one called "I worked at the United Nations with Baptista da Silva."
 

More on the fake economist here. 

Is the financial sector too large?

Here are two attempts at addressing this question:

1. Robin Greenwood and David Scharfstein.
2. John Cochrane.

A Reading for the Pigou Club

From the National Journal.

Hyperinflation in Hell

Allocating Inauguration Tickets

Here is a good topic for class discussion.

Background: The Congress allocates free tickets to the presidential inauguration, often by lottery.  Some winners of the lottery try to sell them for thousands of dollars.  Senator Schumer objects to the resale.

Question 1: When David,  a lottery winner, sells his ticket to Anne, both David and Anne are better off.  Who is worse off?

Question 2: Senator Taxcut proposes auctioning off the tickets and rebating the revenue lumpsum to all taxpayers.  Who would be better off?  Who would be worse off?  Which group is larger?

Question 3: Senator Deficithawk proposes auctioning off the tickets from the get-go to reduce the national debt.  What are the pros and cons of that proposal?

The Gains from Trade

A story of how a model employee outsourced his own job.