Over at Grasping Reality: Monday DeLong Smackdown: Macroeconomy Mean-Reversion Edition

Over at Grasping Reality: Monday DeLong Smackdown: Macroeconomy Mean-Reversion Edition: Robert Waldmann saves me from having to read further in David Graeber’s Debt: The First Five-Thousand Mistakes this Monday… On unemployment-rate mean-reversion:

Robert Waldmann: ‘I will attempt a DeLong smackdown…

…Your analysis is notably different from Paul Krugman’s analysis of private sector employment…. The difference is that you impose the assumption that everything before 2008 was the same. In contrast, Krugman argues (and argued in 2008) that financial crisis recessions are different from inflation fighting recessions. Spring 91 through (at least) Spring 93 saw the ‘jobless recovery’. In 1993 you were attempting to understand why things were different pre- and post-1991. The 2001 mini-recession was followed by recovery with declining employment–the ‘job-loss recovery’. At the time, you wrote something was going very wrong with the US labor market. Now there is a desperate need for jobs and you don’t see a pattern in jobless, job loss, and job lust.”