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Robert Waldmann

Robert Waldmann

Robert J. Waldmann is a Professor of Economics at Univeristy of Rome “Tor Vergata” and received his PhD in Economics from Harvard University. Robert runs his personal blog and is an active contributor to Angrybear.

Articles by Robert Waldmann

A Modest Proposal

September 2, 2021

Really modest and meant seriously (apologies to Swift).

All Senators and Representatives get a full pension for their natural lives (equal to salary)They may never ever receive any money from any entity other than the Federal Government. No salary and all investments must be in Treasury securities (oh and nooo royalties – ever). No revolving door, no financial interests other than avoiding US Treasury default on salary, pension, interest and face value.So non rich interested make the salary something not as absurdly low as it is. The cost of raising it to $1 million/year is trivial compared to the cost of some (not all probably not most) legislators thinking about post congressional employment and how the lobbyists currently begging for their

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Manchin on Voting Rights

June 19, 2021

The news is that Joe Manchin has described a voting rights compromise which he supports. Also Republicans immediately said it was unacceptable to them. This reminds everyone that there will be no bipartisan compromise on an issue where the two parties have diametrically opposite interests. If there were any Republicans who did not equate democrats with Democrats, and pigs could fly, it would be different, but there aren’t.

I am reasonably confident that nothing will come of this. To pass a bill it would be necessary to eliminate the filibuster and Manchin (and Sinema) won’t do that. However, I am actually interested in an incredibly vague part of Manchin’s proposed bill “Ban partisan gerrymandering and ‘use computer models,’ the latter of which

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JOLTS

June 12, 2021

I am wondering about Job Openings and Labor Turnover Survey (JOLTS) data. The reason is that I am interested in the extremely record high job vacancy rate of 6%, the moderately high unemployment rate of 5.8% and the moderately high hiring rate of 4.2% of employment in April (last month of data available). There are reports of firms having trouble finding workers, including the results of systematic surveys. Republican governors have decided to send money back to the Federal Government rather than pay the additional $300 per week unemployment benefits, because they think the over-generous benefits are causing the unemployed to turn down jobs they should take.

Others insist that the problem is childcare with unemployed parents staying home,

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Larry Summers and the Growth Convincing Argument

June 3, 2021

First I should note that at a time when I had totally messed up my life, Larry Summers saved me from well earned unemployment. As my PhD Supervisor, he was amazingly patient about the amazing delays preceding my actually producing anything along the lines of a written document.

The title is a reference to a hypothetical dog.

an economics professor, Solomon Fabricant, coined the term ”growth recession” to describe a period in which the economy slows dramatically but keeps sputtering forward. [skip]Not everyone approved of the term. Herbert Stein of President Nixon’s Council of Economic Advisers suggested that one might as well call a dog ”a growth horse.”

(by the way, I just linked to an article in the New York Times written less than 3

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QE After Action Report

May 31, 2021

I think it is now possible to look back on the debate on the effectiveness of non-standard monetary policy at the (near) zero lower bound. I will now “mark my beliefs to market” – J B DeLong.

I think it is also a mildly worthwhile exercise, because it is relevant to the current debate about fiscal policy. A key argument for massive fiscal stimulus, well greater than any estimated output gap, is that making predictions, especially about the future, is harder than usual. This strengthens the usual argument that, as the Federal Funds rate is near zero, it is better for fiscal policy to be too stimulatory, because interest rates can be raised if the economy overheats but can’t be cut if it underheats. Given the huge uncertainty, there is a case

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Slowly Boring into the Heart of Wokeness

May 11, 2021

Matt Yglesias is stimulating heated discussion — that’s his job. Before getting to the point, I think that his $250,000 guaranteed advance from SubStack has stimulated a lot of extremely intense envy (I know I envy him) which tends to add a bit of spice to his provocative posts one of which is

Tema Okun’s “White Supremacy Culture” work is bad a diatribe contra someone of whom I have never heard. I think the tone is harsher than it has to be (see provocative) but mostly like the essay very much. I will discuss it after the jump.

But before the jump I would really really like to note a certain cognitive dissonance in the essay. Here are a few block quotes of Yglesias:

The craziest thing about “The Characteristics of White Supremacy

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Beutler & Yglesias on Strategy

March 5, 2021

I am going to comment on two smart guys who believe that they disagree about the optimal political strategy for Democrats.

Brian Beutler wrote an interesting essay criticizing what he calls “issue polling essentialism”. It includes the text

The topic occurred to me after I recorded last week’s Rubicon with my friend Matt Yglesias, where we took different sides on the question of how determinative issue polling should be in setting progressive priorities. We are no longer friends. (Just kidding. Unless…? Better listen to the episode!)

I trust they are still friends, but Yglesias is a bit peeved. He wrote this Thread beginning “I think this piece does not describe the position it is critiquing accurately.”

In fact, after mentioning

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Covid 19 One Dose or Two IV

February 19, 2021

Angrybearblog December 22,2020 “Eyeballing, the first shot looks 80-90% effective.” (Moderna) and “my guess is that the first shot was about 90% effective over this period.” (Pfizer).

Angrybearblog December 24,2020

New England Journal of Medicine February 17 2021

We used documents submitted to the Food and Drug Administration2 to derive the vaccine efficacy beginning from 2 weeks after the first dose to before the second dose (Table 1). Even before the second dose, BNT162b2 was highly efficacious, with a vaccine efficacy of 92.6%, a finding similar to the first-dose efficacy of 92.1% reported for the mRNA-1273 vaccine (Moderna).3With such a highly protective first dose, the benefits derived from a scarce supply of vaccine could be

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What The Democratic Senators Were thinking

February 13, 2021

As is very rare, I find myself disagreeing with Josh Marshall who asked “What Were the Democratic Senators Thinking?” when they agreed to accept Representative Jaime Herrera-Butler’s assertions (that Trump sided with the insurgents over minority leader McCarthy) in writing when Trump’s lawyers stipulated that they could be assumed to be accurate.

First I will play amateur lawyer (and link to an actual lawyer who contested Marshall and was posted by Marshall) — the managers said they asked to call witnesses specifically to present that (hearsay) testimony. After listeining to their closing arguments it is clear that they were being frank — the testimony was critical to their case against Trump. Assuming it is accurate (as agreed) it proves that

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Debt and Summers II

February 7, 2021

Larry Summers has responded to his critics. My first thought is, yes he is still really smart.

Also Olivier Blanchard also thinks the Covid Relief bill is too generous, and, in particular objects to the $1400 for most Americans. Note that Blanchard is the author of the main citation in my critique of Summers (although I should also have cited Summers on secular stagnation, Delong and Summers on the Keynesian Laffer Curve and Blanchard and Summers on hysteresis).

Summers makes 4 arguments.

Don’t blame me for the fact that the ARRA was too small. Here I think it doesn’t really matter, and that he is mostly right. Certainly he argued frequently for higher deficits.

Fearing Secular stagnation does not imply that one prefers $1.9

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Debt and Summers II

February 7, 2021

Larry Summers has responded to his critics. My first thought is, yes he is still really smart.

Also Olivier Blanchard also thinks the Covid Relief bill is too generous, and, in particular objects to the $1400 for most Americans. Note that Blanchard is the author of the main citation in my critique of Summers (although I should also have cited Summers on secular stagnation, Delong and Summers on the Keynesian Laffer Curve and Blanchard and Summers on hysteresis).

Summers makes 4 arguments.

Don’t blame me for the fact that the ARRA was too small. Here I think it doesn’t really matter, and that he is mostly right. Certainly he argued frequently for higher deficits.

Fearing Secular stagnation does not imply that one prefers $1.9

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Debt and Taxes IV: This Time It’s Personal

February 6, 2021

It seems that many people have concerns about Larry Summers’s concerns about overdoing the Covid 19 Relief bill. My first reaction to his op-ed is here, but I realize that I had more nearly relevant things to say in the Debt and Taxes series and, in particular in debt and taxes I and debt and taxes II. (the one with plain ascii algebra and only 2 comments but I promise it is relevant).

I’m going to try to focus. First, Summers really criticizes giving an additional $1400 to most US citizens. He discussed the bill in general, but his concerns are about the wisdom of that (huge) provision and not the money for supplementary unemployment insurance, unemployment insurance for people not eligible for regular unemployment insurance, money for vaccine

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Debt and Taxes IV: This Time It’s Personal

February 6, 2021

It seems that many people have concerns about Larry Summers’s concerns about overdoing the Covid 19 Relief bill. My first reaction to his op-ed is here, but I realize that I had more nearly relevant things to say in the Debt and Taxes series and, in particular in debt and taxes I and debt and taxes II. (the one with plain ascii algebra and only 2 comments but I promise it is relevant).

I’m going to try to focus. First, Summers really criticizes giving an additional $1400 to most US citizens. He discussed the bill in general, but his concerns are about the wisdom of that (huge) provision and not the money for supplementary unemployment insurance, unemployment insurance for people not eligible for regular unemployment insurance, money for vaccine

Read More »

Debt and Taxes IV:This Time It’s Personal

February 6, 2021

It seems that many people have concerns about Larry Summers’s concerns about overdoing the Covid 19 Relief bill. My first reaction to his op-ed is here, but I realize that I had more nearly relevant things to say in the Debt and Taxes series and, in particular in debt and taxes I and debt and taxes II. (the one with plain ascii algebra and only 2 comments but I promise it is relevant).

I’m going to try to focus. First, Summers really criticizes giving an additional $1400 to most US citizens. He discussed the bill in general, but his concerns are about the wisdom of that (huge) provision and not the money for supplementary unemployment insurance, unemployment insurance for people not eligible for regular unemployment insurance, money for vaccine

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Larry Summers has Concerns

February 5, 2021

Early this morning the Senate passed a budget resolution telling committees to spend an additional $ 1.9 T on Covid relief. Yesterday, Larry Summers wrote an op-ed expressing concerns about the imminent resolution. Like many many many people, I disagree in part. Oddly, I think I disagree less strongly with Summers than most US adults do.

Summers makes two arguments. The first is that the stimulus is too large

The proposed stimulus will total in the neighborhood of $150 billion a month, even before consideration of any follow-on measures. That is at least three times the size of the output shortfall.

Which implies a risk of overheating and undesirably high inflation

there is a chance that macroeconomic stimulus on a scale closer to World

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Larry Summers has Concerns

February 5, 2021

Early this morning the Senate passed a budget resolution telling committees to spend an additional $ 1.9 T on Covid relief. Yesterday, Larry Summers wrote an op-ed expressing concerns about the imminent resolution. Like many many many people, I disagree in part. Oddly, I think I disagree less strongly with Summers than most US adults do.

Summers makes two arguments. The first is that the stimulus is too large

The proposed stimulus will total in the neighborhood of $150 billion a month, even before consideration of any follow-on measures. That is at least three times the size of the output shortfall.

Which implies a risk of overheating and undesirably high inflation

there is a chance that macroeconomic stimulus on a scale closer to World

Read More »

Covid Vaccination One Dose or Two iV

February 4, 2021

I didn’t expect this to be a series of posts, but there is news since I wrote post number III.

There is a partial change of subject, because the news concerns the Oxford/AstraZeneca adenovirus based vaccine and not the mRNA based vaccines which I discussed before.

In the UK they decided to delay the second dose for 3 months in order to get a first dose in as many people as possible as quickly as possible. This is roughly what I proposed in post I. Since then, Israeli HMOs have noted a significant rate of infection (detected by PCR screening) two to three weeks after the first dose the Pfizer/BioNTech vaccine (link to same post number III and post number II). After 3 weeks, they injected the second dose, so they can’t follow further.

Now the

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Covid Vaccination One Dose or Two iV

February 4, 2021

I didn’t expect this to be a series of posts, but there is news since I wrote post number III.

There is a partial change of subject, because the news concerns the Oxford/AstraZeneca adenovirus based vaccine and not the mRNA based vaccines which I discussed before.

In the UK they decided to delay the second dose for 3 months in order to get a first dose in as many people as possible as quickly as possible. This is roughly what I proposed in post I. Since then, Israeli HMOs have noted a significant rate of infection (detected by PCR screening) two to three weeks after the first dose the Pfizer/BioNTech vaccine (link to same post number III and post number II). After 3 weeks, they injected the second dose, so they can’t follow further.

Now the

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Covid Vaccination one dose or 2 III

January 29, 2021

First, I want to discuss the evidence on effectiveness of the first dose of the BioNTech Pfizer Covid 19 vaccine. The data from few person – weeks of the phase III trial suggested that one dose was highly effective after 10 days. This is based on 4 of roughly 40 cases in vaccinated participants.

Much larger samples from the not randomized controlled just by the general population experience in Israel suggest lower effectiveness. I think the most interesting data are from the Israeli HMO Maccabi who followed a cohort of 50,777 vaccinated Maccabi members. The plot shows 7 day moving averages of diagnosis by PCR. They are very close for vaccinated and not vaccinated Maccabi members for about 14 days. This suggests that all of the many biases

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Covid Vaccination one dose or 2 III

January 29, 2021

First, I want to discuss the evidence on effectiveness of the first dose of the BioNTech Pfizer Covid 19 vaccine. The data from few person – weeks of the phase III trial suggested that one dose was highly effective after 10 days. This is based on 4 of roughly 40 cases in vaccinated participants.

Much larger samples from the not randomized controlled just by the general population experience in Israel suggest lower effectiveness. I think the most interesting data are from the Israeli HMO Maccabi who followed a cohort of 50,777 vaccinated Maccabi members. The plot shows 7 day moving averages of diagnosis by PCR. They are very close for vaccinated and not vaccinated Maccabi members for about 14 days. This suggests that all of the many biases

Read More »

Debt and Taxes III

January 29, 2021

The reliably brilliant Catharine Rampell argues against giving $1400 to quite so many people. She notes

The Democratic-controlled House passed legislation in December to expand stimulus payments to $2,000. This was marketed as aid to the poor and middle class, but the bill would have given some money to 94 percent of households — including those making over $300,000. President Biden, who supports more direct payments, said this week that he is open to negotiating eligibility details to ensure the funds are targeted to the needy.

I actually agree that it would be a good idea to target the additional 1400 more. I think it very likely that this will be the condition imposed by political Manchinations. Rampell considers some arguments for

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Debt and Taxes III

January 29, 2021

The reliably brilliant Catharine Rampell argues against giving $1400 to quite so many people. She notes

The Democratic-controlled House passed legislation in December to expand stimulus payments to $2,000. This was marketed as aid to the poor and middle class, but the bill would have given some money to 94 percent of households — including those making over $300,000. President Biden, who supports more direct payments, said this week that he is open to negotiating eligibility details to ensure the funds are targeted to the needy.

I actually agree that it would be a good idea to target the additional 1400 more. I think it very likely that this will be the condition imposed by political Manchinations. Rampell considers some arguments for

Read More »

What is to be done with the Senate ?

January 26, 2021

What are we going to do about Mitch McConnell and his enabler Jim Manchin ? McConnell is blocking the establishment of committees for the 117th Senate. This means that the committees with Republican Chairs and Republican majorities will exist and operate in the Senate with a Democratic majority. He demands that Democrats promise not to eliminate the filibuster before he ends the filibuster of the resolution setting up the 117th Senate.

One simple solution is to introduce bills on the floor. This is what McConnell did with his bill to repeal and replace the ACA. McConnell objecting to contempt for regular order is, quite possibly, absurd enough to be mocked even by very serious centrists. The point is that McConnell can block the establishment of

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What is to be done with the Senate ?

January 26, 2021

What are we going to do about Mitch McConnell and his enabler Jim Manchin ? McConnell is blocking the establishment of committees for the 117th Senate. This means that the committees with Republican Chairs and Republican majorities will exist and operate in the Senate with a Democratic majority. He demands that Democrats promise not to eliminate the filibuster before he ends the filibuster of the resolution setting up the 117th Senate.

One simple solution is to introduce bills on the floor. This is what McConnell did with his bill to repeal and replace the ACA. McConnell objecting to contempt for regular order is, quite possibly, absurd enough to be mocked even by very serious centrists. The point is that McConnell can block the establishment of

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Desirable incentive effects of income taxation V

January 26, 2021

Fifth and last. Not relevant to the USA. Back in the day when US unions weren’t totally feeble, MacDonald and Solow wrote a brilliant paper on collective bargaining and tax based incomes policy.

Imagine a world in which firms must negotiation with unions (for example imagine Europe). The unions have two aims — they want high wages and they want high employment in the sector they represent. This means that a GM&UAW right to manage contract which specifies wages and working conditions and allows management to choose output, investment, and employment is Pareto inefficient. It makes sense to specify wages and the level of production (firms must produce more than the amount that maximizes profits given wages).

If unions have power (hah!) and

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Desirable incentive effects of income taxation V

January 26, 2021

Fifth and last. Not relevant to the USA. Back in the day when US unions weren’t totally feeble, MacDonald and Solow wrote a brilliant paper on collective bargaining and tax based incomes policy.

Imagine a world in which firms must negotiation with unions (for example imagine Europe). The unions have two aims — they want high wages and they want high employment in the sector they represent. This means that a GM&UAW right to manage contract which specifies wages and working conditions and allows management to choose output, investment, and employment is Pareto inefficient. It makes sense to specify wages and the level of production (firms must produce more than the amount that maximizes profits given wages).

If unions have power (hah!) and

Read More »

Desirable Effects of Income Taxation IV Dissipative Signaling

January 24, 2021

From now on, these posts will be reviews of the established literature. I will assume, as is standard, that people are completely selfish. The point is to show that, even if people are selfish, there are desirable incentive effects of income taxation.

As is often the case, the results of 50 year old theory turn out to depend on the assumption of symmetric information. If some agents know things that other agents don’t know, then free market outcomes can easily be Pareto inefficient.

One very old example is due to A Michael Spence who considered a model in which people don’t learn anything useful in college, but get degrees just to prove they can. Spence was dean of Harvard’s faculty of Arts and Sciences, so he should know. Basically the

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Debt and Taxes III

January 22, 2021

I don’t know if I should try to make my contributions to AngryBear a noahpinion sub substack or if I should put this over at my personal blog, but I am always stimulated by Noah’s posts . His most recent “No one knows how much the government can borrow” is on a topic I’ve mentioned here (and here also Brad all following Blanchard): How much should we worry about the huge and rapidly growing US national debt ?

Noah wrote that he doesn’t know and he doesn’t think anyone else does either. My comment is that Noah assumes things we don’t know. In particular, he assumes that we know something about how much the US Federal Government can borrow while paying record low interest rates. Noah write well, so it is hard to excerpt

“If the U.S. federal

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Covid Vaccination one dose or 2 II

January 20, 2021

There is evidence from Israel that one dose of the Pfizer vaccine is less effective than was suggested by the few person-days of evidence in the phase III trials. In Israel  “over 12,400 have people tested positive for coronavirus after receiving vaccine shots” Israeli health officials estimate that one shot is about 50% effective after 14 days . The control group is not matched, it’s not a randomized trial, but it is evidence that the second dose provides benefits on the order of the benefits of the first and is evidence against my proposal to delay the second dose.

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Debt and Taxes II

January 19, 2021

This is an extended post on the caveat to debt and taxes 1. It is joint work with Brad DeLong and Barbara Annicchiarico. The point is that, in his Presidential Address, Olivier Blanchard notes that the argument that higher debt causes increased welfare is weaker than the argument that it is feasible.

The Treasury can afford to increase debt D_t just by just giving bonds away and can pay interest and principal without ever raising taxes so long as the safe rate of interest which it has to pay is lower than the trend rate of growth of GDP. In that case it is possible to just roll over the debt forever and the debt (including the additional debt) shrinks to insignificance as a share of GDP.

Following Blanchard we assume zero trend growth and an

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