Pardon me, but this is precisely what they have NOT shown. Once the flaws in the R&R paper are fixed, what remains is a modest negative correlation between public debt and GDP growth. The paper does not say, and R&R have explicitly disavowed that they have shown, that large debt causes low growth.
That there is such a correlation is not at all surprising. Others have presented evidence that supports the causality going in the other direction--that low growth causes higher public debt. What's more, this is far more plausible as an explanation of R&R's data.
Software is the new prose. It is currently the best way to capture knowledge and make it more liquid; more easily applied. In the past you would write and publish a book. This is still effective, but requires a person to read the book in order to employ the knowledge, a time-consuming and potentially expensive process.
The real value (and cost) is in the knowledge--the often hard work required to figure things out. That's why it is often much easier to rewrite software than to write the first version. I predict that coding and "figuring stuff out" will, in the future, be teased apart, and that only the latter will be well compensated. And, a liberal arts education would be excellent preparation for such a career, in my opinion.
I completely disagree that today's innovations are of less significance than those mentioned. Consider:
Each of the innovaitons mentioned has taken many years (or, in the case of running water, over 2000 years) to have its impact. So, we should be looking 50 to 2000 years down the road to see the impact of our current crop.
Our electronics are truly remarkable. They are the most complex artifacts ever created by any civilization, by many orders of magnitude. Indeed our electronic "gadgets" by some measures are more complex than we are! Humans have some 30,000 genes. Perhaps there are three times as many regulatory sites in the human genome (a guess). But garden-variety microprocessors routinely have five orders of magnitude more transistors than that. And this explosion of complexity (i.e. Moore's Law) shows no sign of slowing down.
For another example, consider current efforts to build quantum computers based on quantum entanglement. Purposefully entangled qbits represents a completely new state of matter that, as far as we know, has never existed before.
Recent advances in biology and medicine have resulted in an unprecedented understanding of these subjects. Within just the last ten years we have gone from the comparatively primitive gene-protein equivalence view to a much broader understanding of biology that includes, for example epigenetics. Of course that starting point was, itself, a huge scientific triumph.
Where will these scientific advances lead? We need to wait at least 50 years, and perhaps much longer to know the answer. For example, number theory, which currently secures a significant fraction of the world's wealth, was, until 35 years ago, an "impractical" branch of pure mathematics -- under development for roughly the last 4000 years!
I have no doubt whatsoever that some subset of today's innovations will withstand this test of time, and will prove to be very significant to our civilization.
It is posts like this that give economics a bad reputation!
After discussing evidence that the fiscal multiplier under current conditions is much greater than one, Mr. Pisani-Ferry goes on to prescribe a policy of austerity. With a large multiplier, such a policy will directly harm the economy of any nation that tries it. The resulting depression will only make the fiscal situation worse. And, those who invest in sovereign debt understand all of this very well.
After two years, the evidence is clear: The more firmly the policy of austerity has been followed, the worse the results. The myth of the "confidence fairy" has been thoroughly debunked.
Are we supposed to simply not notice that the discussion of economics in this article is exactly at odds with its policy prescription?
Learning About Growth from Austerity
Pardon me, but this is precisely what they have NOT shown. Once the flaws in the R&R paper are fixed, what remains is a modest negative correlation between public debt and GDP growth. The paper does not say, and R&R have explicitly disavowed that they have shown, that large debt causes low growth.
That there is such a correlation is not at all surprising. Others have presented evidence that supports the causality going in the other direction--that low growth causes higher public debt. What's more, this is far more plausible as an explanation of R&R's data.
Will Programmers Rule?
Software is the new prose. It is currently the best way to capture knowledge and make it more liquid; more easily applied. In the past you would write and publish a book. This is still effective, but requires a person to read the book in order to employ the knowledge, a time-consuming and potentially expensive process.
The real value (and cost) is in the knowledge--the often hard work required to figure things out. That's why it is often much easier to rewrite software than to write the first version. I predict that coding and "figuring stuff out" will, in the future, be teased apart, and that only the latter will be well compensated. And, a liberal arts education would be excellent preparation for such a career, in my opinion.
Innovation Crisis or Financial Crisis?
I completely disagree that today's innovations are of less significance than those mentioned. Consider:
Each of the innovaitons mentioned has taken many years (or, in the case of running water, over 2000 years) to have its impact. So, we should be looking 50 to 2000 years down the road to see the impact of our current crop.
Our electronics are truly remarkable. They are the most complex artifacts ever created by any civilization, by many orders of magnitude. Indeed our electronic "gadgets" by some measures are more complex than we are! Humans have some 30,000 genes. Perhaps there are three times as many regulatory sites in the human genome (a guess). But garden-variety microprocessors routinely have five orders of magnitude more transistors than that. And this explosion of complexity (i.e. Moore's Law) shows no sign of slowing down.
For another example, consider current efforts to build quantum computers based on quantum entanglement. Purposefully entangled qbits represents a completely new state of matter that, as far as we know, has never existed before.
Recent advances in biology and medicine have resulted in an unprecedented understanding of these subjects. Within just the last ten years we have gone from the comparatively primitive gene-protein equivalence view to a much broader understanding of biology that includes, for example epigenetics. Of course that starting point was, itself, a huge scientific triumph.
Where will these scientific advances lead? We need to wait at least 50 years, and perhaps much longer to know the answer. For example, number theory, which currently secures a significant fraction of the world's wealth, was, until 35 years ago, an "impractical" branch of pure mathematics -- under development for roughly the last 4000 years!
I have no doubt whatsoever that some subset of today's innovations will withstand this test of time, and will prove to be very significant to our civilization.
Fiscal Closing Time?
It is posts like this that give economics a bad reputation!
After discussing evidence that the fiscal multiplier under current conditions is much greater than one, Mr. Pisani-Ferry goes on to prescribe a policy of austerity. With a large multiplier, such a policy will directly harm the economy of any nation that tries it. The resulting depression will only make the fiscal situation worse. And, those who invest in sovereign debt understand all of this very well.
After two years, the evidence is clear: The more firmly the policy of austerity has been followed, the worse the results. The myth of the "confidence fairy" has been thoroughly debunked.
Are we supposed to simply not notice that the discussion of economics in this article is exactly at odds with its policy prescription?
The Roots of Chinese/Japanese Rivalry
Don't you think that the Nanking massacre deserves at least a tiny mention here? Just saying.