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Pastimes : Austrian Economics, a lens on everyday reality
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From: TimF1/16/2009 7:24:31 PM
   of 445
 
Becker on Over-Hasty Conversion
Bryan Caplan

"When the facts change, I change my mind," say Keynes. But how do you explain people who change their minds when faced by facts they should have known all along? Gary Becker wants to know:

As Posner and others have indicated, there appears to have been a huge conversion of economists toward Keynesian deficit spenders, but the evidence that produced such a "conversion" is not apparent (although maybe most economists were closet Keynesians all along). This is a serious recession, but Romer and Bernstein project a peak unemployment rate without the stimulus of about 9%. The 1981-82 recession had a peak unemployment rate of about 10.5%, but there was no apparent major "conversion" of economists at that time. What is so different about the present recession compared to that one, and to other recessions since then, that would greatly raise the estimated stimulating effects of government spending on various types of goods and services?

I am baffled as Becker. Can anyone help us out?

econlog.econlib.org
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