Clive Crook’s exchanges with Krugman and Barro are a must-read. In response to Crook’s quite reasonable charge that Krugman and Barro have both made themselves and their profession look bad, the Princeton Punisher charmingly replies, in a post titled “What Happened to Clive Crook”:
Clive used to be a reasonable guy; in his mind he probably still is a reasonable guy. But he has misunderstood what it means to be reasonable.
So there you have it. If Crook thinks Krugman has made himself look bad, that’s probably because he’s forgotten what it even means to be a reasonable person. Clive amply demonstrates his reasonableness through the restraint of his persuasive reply.
But the really fascinating part of Crook’s post is the email exchange with Robert Barro. Unlike Krugman, Barro wants to talk about the relevant economics, not politics. And Barro indeed thinks a lot of important people are guilty of “voodoo macroeconomics.” Is he being a dick? I don’t think so. Barro, unlike Krugman, is one of the world’s best, most cited, and most influential macroeconomists. And he keeps referring to a project he’s working on that provides evidence that the multiplier for non-defense spending is zilch. I’m looking forward to the published study, and to the professional response. If he’s right, we’re pretty clearly about to make an immense mistake. Barro also clarifies a useful distinction worth spreading:
One thing I think you need to be clear on is the distinction between Ricardian equivalence and Keynesian multipliers. The first bears, for example, on how a deficit-finance tax cut affects aggregate demand. The Ricardian view is no effect, and the “standard” view is that the effect is positive but less than one. The multiplier has to do with how a change in aggregate demand affects output. It is possible to have a large multiplier even with Ricardian equivalence, and it is possible to have a small multiplier even without Ricardian equivalence.