Friday, December 30, 2016
If you want to see me at the upcoming ASSA meeting
in Chicago, here is some relevant information.
I will be chairing a session on “Economic Issues
Facing the New President,” with talks from Jason Furman (Council of Economic Advisers), Glenn Hubbard
(Columbia University), Alan Krueger (Princeton University), and John Taylor
(Stanford University). The session is on Saturday, January 7, starting at 10:15
am in the Hyatt Regency Chicago, Grand Ballroom AB.
I will also be
introducing the new edition (the 8th) of my Principles text, which
has just published. You can meet me at the Cengage booth from 3 to 4 pm on
Friday, 2 to 2:30 pm on Saturday, and 9 to 9:30 am on Sunday. Feel free
to stop by and say hello.
Wednesday, December 21, 2016
Why Y?
A professor emails me:
My students have the pleasure to use your economics textbook. I have one question: where the symbol "Y" for GDP comes from? All the others, we could detect, such as NX , NCO, etc. My students are curious, and I could not give them a good answer.
My unsatisfying response:
To be honest, I don't know. It is an old convention to use Y to denote real GDP, and I am just following that. But I don't know where or why the convention began.If anyone knows the history and reason for this notation, please email me.
Update 1: Several people email me that the usage goes back to the early Keynesians, which is certainly true. Others suggest that Y is the generic dependent variable, as in y=f(x), which seems an unlikely explanation to me. Still others point out that I is already used for investment, which is true but does not explain the choice of Y for income and output. Some say Y stands for "yield," which seems a useful mnemonic, but I have never seen that word used to describe GDP in a standard published source. So I still don't have a fully satisfying answer.
Update 2: One person writes:
I thought it was well understood that 'Y' is the symbol for real GDP because it is short for "Income" as in "National Income." Since 'I' is already used for other macroeconomic variables, we use the letter that is phonemically or orthographically related to 'I,' namely 'Y' (which is known in languages like French and Spanish as "Greek i").
Maybe this is the right answer, but one thing I am sure of is that this is not "well understood," at least not by readers of this blog, judging from the many other emails I received.
Update 3: A Harvard student looks at the history:
The earliest reference to GDP as "Y" I could find is Kalecki 1937. The first articles to formalize the IS-LM model (Hicks 1937, Harrod 1937, Meade 1937) all seem to refer to national income as "I" (for income), and Cobb Douglas (1928) calls it "P" (for production). I'd be curious to see if anyone can find an earlier reference to "Y" than Kalecki 1937. It appears there as Y=f(I) (income as a function of investment), which seems like a vote in favor of the y=f(x) argument (but I agree that's not a very satisfying explanation).
Tuesday, December 13, 2016
A Possible Victory for Alan Auerbach
Tax policy is moving in fascinating directions.
You can read more about the Auerbach proposal here and here.
You can read more about the Auerbach proposal here and here.
Saturday, December 10, 2016
Monday, December 05, 2016
From the Harvard Skit Party
Harvard Econ G4 Skit 2016 - "Rise Up" (A Hamilton Parody) from Econ Skits on Vimeo.
Also another entry here.
Also another entry here.
Sunday, December 04, 2016
Summers on the Carrier Deal
Interesting observations from Larry. A tidbit:
Some of the worst abuses of power are not those that leaders inflict on their people. They are the acts that the people demand from their leaders.Addendum: Also see Keith Hennessey on the topic.
Friday, December 02, 2016
Thursday, December 01, 2016
Saturday, November 26, 2016
Tuesday, November 15, 2016
An Interview with Ed Conard
Click here to watch me interview Ed Conard about his new book, The Upside of Inequality: How Good Intentions Undermine the Middle Class for C-SPAN Book TV’s “After Words.”
Saturday, November 12, 2016
The Triumph of the Less Educated
In a Times column back in July, I noted that the Brexit vote was strongly correlated with education. The recent presidential election shows the same pattern: "College graduates backed Clinton by a 9-point margin (52%-43%), while those without a college degree backed Trump 52%-44%." The graph below shows that it is unusual for the more educated and less educated to be in such substantial disagreement.
Source.
Source.
Friday, November 11, 2016
Wednesday, November 09, 2016
On the Election Results
I did not support Mr. Trump, but now that he is our President-elect, I wish him well.
To my many friends who are now freaking out, I encourage you to take a deep breath and calm down. Our political and economic system is more robust than you sometimes give it credit for being.
Earlier this year, I wrote:
To my many friends who are now freaking out, I encourage you to take a deep breath and calm down. Our political and economic system is more robust than you sometimes give it credit for being.
Earlier this year, I wrote:
People often
ask me whether it is frustrating to work in Washington, noting how hard it is
to get anything done. Yes, in some ways, it is. This episode is only one example
where our good policy (as my White House colleagues and I saw it) was subverted
by an uncooperative legislature.
Yet,
over time, I have come to appreciate that frustration for those in policy jobs
is not a bug in the system but rather a feature. The founding fathers, in their
great wisdom, built this tension into the system. In high school civics
classes, it goes by the name “checks and balances.”
A common
lament is that there is too much gridlock in Washington, and maybe there is.
But imagine that your least favorite candidate wins the next presidential
election. Might you be grateful when the new President and his or her CEA chair
become frustrated while trying to implement their new ideas for economic policy?
Monday, November 07, 2016
Monday, October 31, 2016
Before the Flood
A movie, approximately 1 1/2 hours, on climate change, with yours truly making a brief appearance at around 59:40. (Update: Sorry, it seems no longer to be freely available.)
Sunday, October 30, 2016
Coming soon
If you teach introductory economics, you might be interested to know that my publisher is hosting a number of webinars in the coming weeks to show some of the changes and enhancements to the 8th edition of my favorite textbook and to demonstrate the digital technology that supports the text. You can sign up here. (The new edition will be coming off the presses in about a month, ready for spring classes.)
Saturday, October 29, 2016
Wednesday, October 26, 2016
Monday, October 24, 2016
An Upcoming Interview
This coming Friday, I will be interviewed by Frank Conway at an Economics Teaching Conference. You can hear a live broadcast of the interview by registering here.




