Ricardian equivalence

Paul Davidson argues that a theory is the way humans describe real world observations on the basis of a model that starts with a few axioms. An axiom is an assumption accepted as a universal truth that does not need to be proved. From this…

By Claus Vistesen Events in Japan and Libya do not seem to have derailed the ongoing positive sentiment in the market. But they just might have alerted various Masters of the Universe that black holes (or was that swans?) are both…

By Marshall Auerback and Edward Harrison. Marshall's view Ed has asked me to deal specifically with the issue of Ricardian equivalence, the theorem used by anti-government proponents to argue that fiscal deficits are counterproductive and…

This is just in from PIMCO's Paul McCulley, who seems to have caught on to the Wynne Godley sectoral balances approach to viewing the macro economy (hat tip Scott).  He says: Double-entry bookkeeping was a great invention. It is a…

The question of fiscal sustainability looms large at the moment - not just in the peripheral nations of the eurozone, but also in the UK, the US, and Japan. More restrictive fiscal paths are being proposed in order to avoid rapidly rising…