American hobos in the early 1900s made do with one or another variation of Mulligan stew. But there’s no reason we have make do with the economic stew dished up Casey Mulligan.
Mulligan attacks Jared Bernstein for emphasizing the role of consumption expenditures in creating and sustaining economic growth. For Mulligan, who surveys a few mainstream texts in growth theory, investment is the only thing that matters.
I can only conclude that Mulligan is either a dolt or he’s being disingenuous.
That’s because the kind of growth Bernstein is referring to, which comes out of Keynesian macroeconomics, is really about short-run changes in output that are part of business cycles. Mulligan, however, is talking about long-run growth that starts with a neoclassical production function and focuses on the role of capital accumulation, technology, and human capital in raising productivity and, over the long run, output per capita.
Either Mulligan doesn’t know the difference between those two areas of economics or he’s deliberately conflating the two and declaring neoclassical growth theory the only valid discussion of growth in economics.
And, in the process, he’s making the argument that almost everyone, except those at the very top, should be reduced to eating hobos’ stew.
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