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Is this post really about two ways of thinking or is it about the complex feelings Sumner has for Krugman? Sumner doesn't seem consider how the minimum wage in

by dimitar 11y ago

Is this post really about two ways of thinking or is it about the complex feelings Sumner has for Krugman? Sumner doesn't seem consider how the minimum wage interacts with Earned Income Tax Credit and that the minimum wage is essentially unchanged since that era - what was high then could be low now. "How much?" matters. There is also new theory since then, much more empirical evidence than the few flawed studies, and of course it is OK to change your mind.

ArkyBeagle 11y ago
I am pretty sure that Sumner has stated a preference for the EITC over a minimum wage over time. As I understand it, that's from a purely control-theory perspective - a lower bound on wages may or may not reduce actual employment so much as it causes a loss of resolution in price signalling. I personally find the whole question gloriously undecidable. Minimum wage exists as a sort of "dead band" in labor markets. I suspect the debate ( such as it is ) between the Monetarists and... whatever Krugman is now is the most productive thing in economics. It's about what and how we measure. The last sentence is the money shot. "Krugman is...the economist for people who hate economics". Just my guess here, but I think that has much more to do with whether or not the Efficient Markets Hypothesis holds over what domains. In a post-Lehman world...
- AnimalMuppet 11y ago
  I believe that Krugman's position is "market monetarism", but I could easily be mistaken...
  - ArkyBeagle 11y ago
    I have read both Sumner ( who is Mr. Market Monetarism ) and Krugman somewhat extensively, and Krugman has only very, very elliptically commented on it. My interpretation of Krugman's interpretation ( see the error bars grow without bound in this sentence ) is "won't happen." Krugman's narrative is ( and it is correct in his dimension ) that the privileged want poor policy for reasons of epistemic closure or something like religious ( deontological ) reasons. This provides an 'oppressor' platform for the polemics, which is what makes him famous. All in all, not a bad suite of tradeoffs. Couple 'a $500 words there but space is limited... they are also hard to substitute for, and they're precise.

by dimitar 11y ago

ArkyBeagle 11y ago

I am pretty sure that Sumner has stated a preference for the EITC over a minimum wage over time. As I understand it, that's from a purely control-theory perspective - a lower bound on wages may or may not reduce actual employment so much as it causes a loss of resolution in price signalling. I personally find the whole question gloriously undecidable. Minimum wage exists as a sort of "dead band" in labor markets. I suspect the debate ( such as it is ) between the Monetarists and... whatever Krugman is now is the most productive thing in economics. It's about what and how we measure. The last sentence is the money shot. "Krugman is...the economist for people who hate economics". Just my guess here, but I think that has much more to do with whether or not the Efficient Markets Hypothesis holds over what domains. In a post-Lehman world...

AnimalMuppet 11y ago
I believe that Krugman's position is "market monetarism", but I could easily be mistaken...
- ArkyBeagle 11y ago
  I have read both Sumner ( who is Mr. Market Monetarism ) and Krugman somewhat extensively, and Krugman has only very, very elliptically commented on it. My interpretation of Krugman's interpretation ( see the error bars grow without bound in this sentence ) is "won't happen." Krugman's narrative is ( and it is correct in his dimension ) that the privileged want poor policy for reasons of epistemic closure or something like religious ( deontological ) reasons. This provides an 'oppressor' platform for the polemics, which is what makes him famous. All in all, not a bad suite of tradeoffs. Couple 'a $500 words there but space is limited... they are also hard to substitute for, and they're precise.