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This brings back a dreadful time, Brad. People of my generation were professionally the equivalent of teenagers back then. All gung-ho about our subject and about the things that we could do. Then came this sad episode. I'm quite sure that a lot of people like me who came of age during that time felt this way: We lost all respect for the guy and his colleagues that were spewing all manner of nonsense (e.g. that multiplier, that misrepresentation of Ricardian Equivalence, that innuendo about Christie Romer and Ben Bernanke being corrupt, that schlock economics, that an accounting identity is an equation (S = I, one of them is still saying the same things) etc.)). On that last part about the accounting identity, it is only half a step from there to a trade policy under the last administration where reducing M increases Y, you know, because Y = C + I + G + (X - M) is an equation, not an accounting identity. I'm sorry, I do not care about the guy anymore (I respected his work in grad school and remember wanting to hear him speak at a seminar or a conference, somewhere). The damage was so severe that whenever I come across anything they say or write (prose or paper), I am on my guard and approach it with this nagging feeling at the back of my head that they must've made a mistake somewhere. For all the wrong reasons, they made Christie Romer's job harder than it should've been. Thanks, but no thanks, is how I think of him and his colleagues now. It shouldn't have been this way. Sad. I wish I hadn't witnessed that episode then. I wish I didn't have to write this today. We've grown, I guess. (My apology for the rant, folks).

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As always, incisive. Timely. We forget economic history and history of economic thought easily, and Professor DeLong does us a service in reminding us of that. Even in the midst of short-frequency revisionism. Excellent post.

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Maybe in August he saw inflation rate expectations dropping quickly and sensed that Bernanke would be limited in the amounts of monetary stimulation he could get past the Board and needed political support. In March, in contrast, expectations were for target inflation. Lucas did not at that point see that financial instability would be enough to trigger a massive demand shock.

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Have your thoughts changed since this article first appeared?

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