tag:blogger.com,1999:blog-2098432983500045934.post3548503562512649915..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: "Potential growth" is real. We just don't know the number.The Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2098432983500045934.post-19500989813454844292013-12-29T17:01:30.454-05:002013-12-29T17:01:30.454-05:00I'm going to play a little word game with you....I'm going to play a little word game with you.<br /><br />"Nominal" growth is real [so to speak] - it's what we measure.<br /><br />"Real" growth is is a fudged number - nominal growth adjusted for inflation. [<a href="http://angrybearblog.com/2013/10/different-views-of-real-median-household-income-and-recessions.html" rel="nofollow">Which turns out to be assuming rather a lot</a>.]<br /><br />Potential growth is an abstraction - What growth might have been if certain conditions [involving even broader assumptions] had held - Which and they didn't, or we wouldn't be speaking in such terms.<br /><br />Moving right along . . .<br /><br /><i>It only demonstrates that forecasters are willing to contradict their own theories </i><br /><br />But they are <b>supply side</b> theories which are contradicted; and since demand side theories are all that are left, it really does demonstrate that weak aggregate demand effects potential growth.<br /><br />Games can sometimes be quite serious.<br /> <br />[4:00 AM ?!? You are a mad man.]<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.com