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March 07, 2019


Patrick Carter

what do you think about the possibility of identifying the output gap by taking a less macro approach:

"Assessing the potential inflationary effect of new spending proposals also requires seriously assessing how underutilised our existing resources are. This requires detailed, expert analysis from a range of industry analysts; not just statistical regressions on aggregate economic data by macroeconomists."



From the Wikipedia entry on Joan Robinson:

Also, Robinson made several trips to China, reporting her observations and analyses in China: An Economic Perspective (1958), The Cultural Revolution in China (1969), and Economic Management in China (1975; 3rd ed, 1976), in which she praised the Cultural Revolution. In October 1964, Robinson also visited North Korea, which implemented social reforms and collectivisation at the time, and wrote in her report “Korean Miracle” that the country's success was due to “the intense concentration of the Koreans on national pride” under Kim Il-sung, “a messiah rather than a dictator”. She also stated in reference to the division of Korea that “[o]bviously, sooner or later the country must be reunited by absorbing the South into socialism.”


Robinson also stated "The only reason to study economics is to avoid being deceived by economists." Which is quite true.


Robinson deceived herself and others because of her politics, not because of her being an academic economist.

Ralph Musgrave

The only solution to this problem is to "suck it and see": i.e. for central bank and government once every five years or so to deliberately pitch demand a bit higher than the more conservative economists would like and see what happens.


While restaurants have a theoretical peak output they operate nowhere near it except for a few hours a week, typically Friday and Staturday nights, with every other hour being less staffed than maximum with less use of the kitchen. Even food trucks who can go to where the demand is don't get max use for more than a few hours a day.

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