Four Reasons To Believe In Keynesian Models

A correspondent asks a good question: what evidence makes me believe that Keynesian economics is broadly right, given the relative absence of experience with large fiscal stimulus programs?

I’d answer that question with several points.

First, we’re talking about a model, not just a prediction about the impact of spending increases. So you can ask about the ancillary predictions of that model as opposed to rival models. Anti-Keynesians assured us that budget deficits would send interest rates soaring; Keynesian analysis said they’d stay low as long as the economy remained far from full employment. Guess who was right?

Also, there are some features of the approach that can be tested separately. Keynesianism isn’t just about sticky prices, but it does generally assume sticky prices — and there is overwhelming evidence, from a variety of sources, that prices are indeed sticky.

Also also: there’s plenty of evidence that monetary policy can move output and employment — and it’s very hard to devise a model in which that is true that doesn’t also say that fiscal policy can be effective, especially when you’re up against the zero lower bound.

Second, while we don’t have a lot of postwar experience with fiscal stimulus, we do have a lot of experience with anti-stimulus, that is, austerity — and that turns out to be reliably contractionary. Again, it’s hard to think of a model in which austerity is contractionary but stimulus isn’t expansionary.

Finally, there is evidence from fiscal expansions in the 1930s, which actually did lead to economic expansion too.

Mainly I’d stress the first point. We have a model of the way the world works, and the world does indeed seem to work that way. And an implication of that model is that fiscal stimulus will work under conditions like those we face now. If interest rates had soared, if the rise in base money had led to rising GDP and/or soaring prices despite the zero lower bound, I would have sat down to reconsider what I thought I knew about macroeconomics. In fact, however, my preferred model has passed the test of events with flying colors, while the other guys’ models have been totally wrong.

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Epic Fail On The Runway: Even Models Can't Walk In Those Shoes!

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When fashion week in New York City rolls around it's never hard to spot the models who are in for the event. 

They tower over the rest of us, their skin is perfect, and even in sweatpants they look put together.

It's a comfort to know they're not perfect.

Yes, even models fall. 

The combination of the highest shoes you've ever seen and a freshly waxed runway makes it difficult to stand- even famous supermodels like Naomi Campbell and Alexandra Tomlinson have had their less-than-graceful catwalk moments.

In honor of fashion week, we took a look at some big spills on recent runways.

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DOUBLE YOUR PLEASURE: These Former Models Made It In Hollywood

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Next year, supermodel Marisa Miller will spend a little less time rolling around on a beach and a little more time running lines on a set.

She just booked a role in "R.I.P.D.," a drama that will also star Jeff Bridges, Mary Louise-Parker and Ryan Reynolds.

And the Victoria's Secret mainstay is far from the first catwalk queen to cross into Hollywood.

Models have been booking movie and TV roles for years -- and the career move is particularly hot right now.

Don't believe us?

All of these actors used to get paid to look pretty -- no dialogue required.

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These Perfectly Detailed Baseball Stadium Models Will Astonish You

  x You have successfully emailed the post. Baseball is one sport where the classic ballparks are often just as much a part of baseball history as the games and players themselves.

Steve Wolf is an artist that specializes in creating models of baseballs most famous ballparks. Wolf typically spends 2,000 hours working on each model, depending on the scale and amount of detail. The attention to detail, right down to the electric lights and the manicured grass, is so incredible that in a photo, it is often difficult to distinguish from the real thing.

One of Wolf's pieces, the model of 1961 Yankee Stadium that covers 49 square feet, was valued at $150,000 in 2007.

Several of Wolf's pieces are featured in the LA Sports Museum. You can see more of Wolf's work and learn more about the artist at MajorLeagueModels.com.

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