Day 475 in the Big Economist House.
10:19 am
Niall Ferguson, Ken Rogoff and Paul Krugman are in the kitchen.
Yesterday, housemates were punished for discussing too many conflicting economic solutions in the FT and the New York Times. They now have a basic weekly shopping budget of £1 per economist per day between them.
Tensions are running high though because lovable Glaswegian Niall and antsy American Paul cannot agree on how to execute a spending plan.
Paul wants to risk everything on booze and cigarettes, claiming it will help them win a luxury food budget in the daily task.
Niall, however, is erring on the side of caution with a plan to invest in bread and water only.
Unable to agree, the economists have called upon Ken Rogoff to mediate.
He has brought a chessboard.
But Paul can’t help himself. He has written another editorial in the New York Times, this time slagging off Ken’s plans for the weekly budget.
A completely baffling piece in the FT. Leave aside the fact that — in the only number presented in the whole piece — he cites his recent work with Reinhart on debt/growth, which is highly questionable. Where I really lost him was when he says, “The academic evidence on Keynesian growth effects of fiscal deficits is thoroughly inconclusive. Ironically, a lot of the newfound conviction comes from the casual empiricism on the growth effects of the Bush tax cuts …”
What? Who’s citing the Bush tax cuts in this debate? Not me, surely; not Brad DeLong; not Christy Romer; not Barry Eichengreen; not Jamie Galbraith. I have no idea where Ken got that, although I suspect that he vaguely imagines that Mankiw citing Romer and Romer had something to do with it, which it didn’t…
Paul’s friends Brad, Christy and Barry have already been evicted and can no longer back his policies up or calm him down.
Big Economist calls Paul to the diary room.
Big Economist warns Paul that bullying will not be tolerated in the Big Economist house and that if he continues to upset the other housemates he will be asked to leave ahead of this week’s final.
For now, all three economist are set to face the public vote on Friday. Paul and Niall have received 85 nominations between them in their time in the Big Economist house. Ken Rogoff has received none.
Who will go and who will win? The US Treasury yield will probably decide.
Related links:
Paul Krugman wants to reach out and punch someone – FT Alphaville
Stephen Roach: ‘We Should Take Out The Baseball Bat’ On Paul Krugman – HuffPo
Krugman gets tetchy – FT Alphaville
Krugman: ‘Back at you, Ferguson’ – FT Alphaville