26
1. During World war II, economists working for US military intelligence, and using analytical tools, identified how bombings should be chosen so as to have the maximum impact on production in Germany.
27
Best analysis of costs of sanctions for Russia versus EU I have read so far, and clear policy conclusions. twitter.com/lugaricano/sta…
28
1. The war in Ukraine will to an increase in gas and oil prices. How much will depend on whether either Russia is willing to limit exports or the EU is willing to limit imports. For the moment, the effects are limited. They could get worse.
29
It is hard to understate the importance of the decision of the European Court of Justice to allow the EU to withhold funds to countries that do not respect the rule of law. It is a truly major decision, decisive for the future of the European Union.
30
A fact that struck me: Russia's GDP (1.4 trillion in dollars) is equal to the sum of Netherlands and Belgium GDP (0.9 and 0.5 trillion respectively)...
31
2. Given China's zero-covid policy, this implies frequent and major lockdowns, with a large effect on activity in China.
It also implies major effects on trade. Sharp limits on travel, inbound and outbound will make it hard to maintain/expand supply chains going through China.
32
1. If it is confirmed that even 3 doses of Sinovac are ineffective against Omicron, China now has 1.4b non immunized citizens... This has major economic implications for China and for the world.
33
A fascinating graph in many ways. The starting point. The steady collapse over 80 years. The sharp, but limited reversal. (from Daniel Wadenstrom, bit.ly/3Fqzicr )
34
For the last year, I have been working on a book on fiscal policy under low interest rates. It will be published by MIT Press in 2022. Meanwhile, MIT Press has made the draft available to all on an open source site, …y-under-low-interest-rates.pubpub.org
35
Concerns about the Biden stimulus plan bit.ly/3qsCMGL were justified. Inflation is running much above what was forecast. We should now concentrate on what comes next, what the Fed may need to do, and what the implications may be. A few thoughts: bit.ly/3n8s7yO
36
Janos Kornai died yesterday. He was one of my heroes, not just because of his research, but because the way he lived his life. Here is an interview of him I did in 1998. kornai-janos.hu/Blanchard1999%…
37
I feel the use of ``stagflation’’ is wrong. We are not seeing anything like stagnation. What we are seeing instead is very strong growth, fueled by private and public demand, hitting supply constraints, and leading to some sharp price increases. Nothing to do with stagflation.
38
Struck by the importance of the collapse of networks in understanding major macro fluctuations. Three examples:
39
3. The link to the English version of the report (warning: a rather voluminous 500+ pages) is available at bit.ly/3hYC0eT
40
1. A year and a half ago, President Macron asked Jean Tirole and me to form an international commission to study future major challenges facing France and think about policies. We decided to focus on three issues, global warming, inequalities, and aging. The report just came out.
41
I am afraid Mr Schäuble misunderstood me. I objected to the Biden stimulus program not because of the increase in debt but because of the size of the demand push it implies and the risk of overheating and inflation. And I do not worry about inflation in the EU.
42
2. An important message: Yes, debt is high, but debt service, the fiscal cost of debt is very low. And this is what matters. If we have good uses for debt, such as the various forms of public investment in the Biden plans, this is the time to do it and issue long maturity bonds.
43
1. A mini revolution in the presentation of the US budget. Two new lines: Real net interest payments (that is, net interest payments corrected for inflation, in dollars and as % of GDP. And striking numbers: They are negative up to 2028, small after that....
44
Not unexpectedly, a great summary of Mundell's contributions and contradictions, by Paul Krugman
voxeu.org/article/mundel…
45
RIP Bob Mundell. The Mundell- Fleming model still today perhaps the best thought-organizing model we have in our macro tool kit.
46
What is happening to Greece's former chief statistician #AndreasGeorgiou is unacceptable. An appeals court has now found him liable of slander... Now in 10th year, #Greece should end the injustice and exonerate him.
amstat.org/asa/News/Greek…
#JusticeForGeorgiou #DataIntegrity
47
Who is this guy? He is stealing my show... twitter.com/RobinWigg/stat…
48
Why I am concerned about the size of the Biden 1.9 trillion package. A closer look at the output gap, the multipliers, and the risk of inflation. bit.ly/2ZpQvzg
49
For those who teach intermediate macro: Gerhard Illing, my coauthor for the German edition of Macroeconomics has written (in english) a chapter on the economic effects of covid. bit.ly/3cZ2J9U. It is richer and slightly more advanced than my own (bit.ly/2GZB375)
50
Let me double down and go through some numbers. I agree that too much is better than too little and we should aim for some overheating. The question is how much. Much too much is both possible and harmful. I think this package is too much.
Robert Solow Professor of economics emeritus, MIT
Fred Bergsten Senior Fellow, Peterson Institute for International Economics