Friday, January 28, 2011

Economists meet at MIT

As part of the 150th Anniversary Celebration, top economists gathered at MIT.

Here's a summary based on the MIT Sloan Management Review blog:

MIT PhD and MIT Professor Peter Diamond pointed out that the credit crunch hit small businesses hardest and as a result:
“Employment growth by small business — relative to employment growth by large business — is way down,”

MIT PhD and Stanford Professor Bob Hall on the causes of the recession:
“It’s entirely the result of a very substantial enforcement policy lapse, of allowing extremely highly leveraged financial institutions to have important roles in the economy without proper regulation,”

MIT PhD and Northwestern Professor Bob Gordon on the stimulus package (with the concurrence of MIT PhD and Princeton Professor Paul Krugman) said that
Obama stimulus did not increase the share of government spending in potential output, because the increase in spending by the federal government wasn’t enough to offset the decline in state and local government spending that was also going on. State and local governments in the U.S., he said, have shed 200,000 jobs in the past year — and they’re just beginning.

MIT PhD and Harvard Professor Greg Mankiw said he was skeptical of infrastructure projects as source of stimulus because they take so long to get going.

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