Thursday, September 24, 2009

Posner, the Keynesian

Richard Posner, one of the denizens of the law-and-economics movement, as well as a federal judge, wrote a book on the economic recession, A Failure of Capitalism. He also has a blog through the Atlantic magazine on the "depression," the term he prefers. Now he has an article in the New Republic on how he became a Keynesian. In addition, he weighs in on economists lack of understanding of the macroeconomy, although he is not as mean-spirited as Krugman. He said he was baffled by the economists' disarray and decided to read Keynes' General Theory himself. What he offers is a principles-level account of Keynes' ideas.
When Posner says that, "There is no professional consensus on the details of what should be done to arrest the downturn," he is correct. But he seems to imply there should be a consensus. But macroeconomics is complex because the macroeconomy is complex. Polls of economists have consistently found economists to be more of one mind on micro issues than macro issues. But, even in micro issues, there can be substantial disagreements. To take Posner's area, law and economics, there is not a consensus on whether capital punishment deters murder. There are philosophical differences, theoretical differences, and empirical differences among people who have examined the issue. This does not imply that we should give up on law and economics or that we should go back to economic analysis of law that predates Coase or Posner's early work.
If you check out his blog, you can see that Posner is also experiencing the rabid rage of Krugman and Brad DeLong because he criticized a speech Christina Romer gave. As a lawyer and judge, he seems thick-skinned enough to deal with the criticism.

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