Choose a macroeconomic issue of current interest for which you can find two edit
ID: 1252414 • Letter: C
Question
Choose a macroeconomic issue of current interest for which you can find two editorial or op-ed columns from national or international newspapers or magazines that take differing positions on the issue. Good sources include such publications as The New York Times, The Wall Street Journal, The Washington Post, The Financial Times, and The Economist. Make sure that the topic is a macroeconomic one, and make sure that it is an editorial or op-ed column (that is, an opinion piece) and not simply a regular new article. List what columns you have chosen below and include copies of each at the end.Explanation / Answer
One issue I think is really interesting is the wide variety of predictions that macroeconomists make. In a recent column, Paul Krugman (http://krugman.blogs.nytimes.com/2009/01/27/a-dark-age-of-macroeconomics-wonkish/) implied this may be due to people confusing accounting identities (like profit=rev-cost) with behavioral identities, like the aggregate demand model. This has lead to a lot of ambiguity on what modern governments should do when confronted with depression. On the other side of Krugman, Eugene Fama uses the behavioral equations (which require actors inside the economy to do things to make them be true) to support his argument as truth. (http://www.dimensional.com/famafrench/2009/01/bailouts-and-stimulus-plans.html) So in conclusion an interesting issue is: is Fama's reasoning, based on a priori reasoning but using a behavioral equation, valid?