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View Diary: Morning Feature: Animal Spirits, Part II - Recession, Banking, Unemployment, Inflation (94 comments)

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  •  Is "disagree" the right word? (4+ / 0-)
    Recommended by:
    Orinoco, winterbanyan, NCrissieB, kktlaw

    Or would it be more accurate to say that without disagreeing with the conventional, technical understandings of economists, A&S would add consideration of the so-called animal spirits into the model? In other words, their argument is not "instead of... " but "in addition to... ".

    We can't get out of a Depression just by tweaking a few technical factors, but we also can't get out just by swapping in some new stories. Unless we also adjust those technical factors, the stories alone aren't going to get us very far.

    In the case of the Great Depression, which was famously ended by the advent of WW2, the war induced massive changes in both the technical and psychological dimensions.

    •  My critique of their thesis ... (3+ / 0-)
      Recommended by:
      DBunn, winterbanyan, kktlaw

      ... which we'll get to Saturday, is that in my opinion they take too little note of technical factors and base too much on psychology.  I've almost finished the book, and I've read no mention of basic changes since the 1950s: peak domestic oil, rebuilding in Europe and Japan, the emergence of new industrial economies in China and India, climate change, and the possibility that we are butting up against the ceiling of human resource consumption.  The last couple of chapters don't seem likely to address those issues, and for me their absence is a serious oversight.

      Good morning! ::hugggggggggs::

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