People From New York City

"First and foremost, Keynesian economics is a theory of aggregate demand and of the effects of aggregate demand on real output and inflation."

"Monetary policy decisions tend to regress toward the mean and to be inertial—and hence biased in just the same way that adaptive expectations are biased relative to rational expectations. But errors like that, while systematic, will generally be small and will tend to shrink over time. And, in return, the system builds in natural safeguards against truly horrendous mistakes."

"The new arguments for rules take an entirely different tack. They are based neither on the ignorance nor the knavery of public officials and, in fact, assume that everyone knows how the economy operates—even the government! Moreover, the government's objectives are assumed to coincide with the people's objectives, and everyone has rational expectations. Despite these seemingly ideal circumstances, modern critics argue that a central bank left with discretion will err systematically in the direction of excessive inflation. To remedy this distortion, they advocate a fixed rule."

"Ann Coulter has become a legend in her own mind."

"Let's knock out the psychobabble. He was a pervert, a child molester, he was a pedophile. And to be giving this much coverage to him, day in and day out, what does it say about us as a country? I just think we're too politically correct. No one wants to stand up and say we don't need Michael Jackson. He died, he had some talent, fine. There's men and women dying every day in Afghanistan. Let's give them the credit they deserve."

"We have to be careful not to allow this to get any legitimacy. I’m taking this seriously in that I’m old enough to remember what happened in the 1960s when the left-wing took to the streets and somehow the media glorified them and it ended up shaping policy. We can’t allow that to happen."

"Leon Kirschner, I think, is an extraordinary composer. Absolutely beautiful, beautiful music."

"Summers’s outlook on economic policy can be summarized by the remark that he gave me some years ago: “If I had your views on economics, I would find another profession.” He meant that if free markets usually worked well and the government ought usually to stay out, then he would find economics to be an uninteresting occupation. Fortunately for Summers, he has always believed in the potential benefits from governmental activism, although the strength of this belief may have diminished over time."

"Things would have worked out a lot better if we had bought our first television set a year earlier, in 1950, so that I could have watched DiMaggio while he was still great. Then I could have shared with my father and other people the vision of the eternal baseball star. It might even have helped me to have more appreciation for some of my elders in the economics profession. But maybe I should be worrying instead about what the young hot shots in economics are thinking of me."

"The role of expectations is not limited to monetary policy but is crucial in many areas of economics, as Bob showed in his later research on investment, unemployment, taxation, public debt management, and asset pricing. In all of these situations, the appropriate evaluation of policy takes account of the way that expectations would be rationally formed."

"Some of the new classical economists are extremely ideological. If you give them evidence, for example, that fully anticipated money matters, evidence counter to their world view, they say that you're wrong. And if you say that their evidence is wrong, they'll say you're wrong again. I give up! Barro once said to me that there isn't any evidence in the world that fiscal policy is effective. Just open your eyes and see episodes of tax cutting and government-spending increases. How about World War II? That had big effects on real output. His response? ... He sometimes shrugs, he sometimes gives a clearer alternative explanation. Sargent is much more serious. He doesn't come to these economic views from a rigidly maintained ideological position. He's a sort of tinkerer, playing an intellectual game. He looks at a puzzle to see if he can solve it in a particular way, exercising these fancy techniques. That's his thing, so to speak. I think Lucas is a blend of those two, actually. He's not extreme as Barro, he's more open. And he's not quite as technical as Sargent."

"One hypothesis about the delay for the award is that the prize committee realizes that recipients tend to shirk once they get the prize. This consideration was particularly important in Gary’s case because he had continued to exhibit high productivity. Thus, the drop in output caused by an early prize for Gary might have had severe adverse consequences for economic research."

"Mundell’s models allowed a significant role for fiscal policy, especially under fixed exchange rates. However, the treatment was entirely Keynesian—an increased budget deficit operated solely by raising the aggregate demand for goods. Moreover, increases in government spending and cuts in taxes had pretty much the same effect on the economy."

"In fact, the only person to rival Friedman for policy influence in the twentieth century is John Maynard Keynes, who had a strikingly different view of the role of government. Keynes was influential because he advocated more government intervention into what he perceived as poorly functioning private economies caught up in the Great Depression. In contrast to Keynes, Friedman put the main blame for the Depression on government failures, especially of monetary policy. Hence, the Depression did not make Friedman a fan of big government. He also found in the Federal Reserve’s failure to prevent deflation an argument in favor of monetary rules. As the world evolved— with low inflation becoming the major mission of central banks and free markets and secure property rights becoming the main policies to promote economic growth—Friedman surely won the intellectual battle."

"My views are more akin to the nineteenth-century liberal philosophy espoused by Milton Friedman, especially in his Capitalism and Freedom. In that work, he proposed many policies that are harmonious with free markets and are receiving serious attention in the United States and other countries. This list includes school choice, the flat-rate income tax, rules for monetary stability, privatized social security, and the elimination of affirmative-action programs."

"The last chapter modeled technological progress as an increase in the number of types of products, N. In this chapter, we allow for improvements in the quality or productivity of each type. This approach has come to be known as the Schumpeterian approach to endogenous growth. We can think of increases in N as basic innovations that amount to dramatically new kinds of goods or methods of production. In contrast, increases in the quality of the existing products involve a continuing series of improvements and refinements of goods and techniques."

"For me, a key lesson is that Friedman’s influence was achieved mainly through the force of ideas, not by direct participation in the policy process."

"One troublesome aspect is the place of rational expectations macroeconomics in the often political debate over Keynesian economics. At least implicitly, many people feel that what's bad for the rational expectations viewpoint is good for the Keynesian one, and vice versa. But it is hard to see how the problems in using the rational expectations approach to explain monetary nonneutrality can alleviate the theoretical and empirical shortcomings of the Keynesian model."

"Adam Smith is, of course, justly lauded for his advocacy of free markets and limited government. Particularly famous is his idea that each person’s pursuit of self-interest leads, as if by an invisible hand, to socially efficient outcomes."

"If we look beyond the issue of monetary nonneutrality, then we do find areas of macroeconomics that use rational expectations and in which important recent progress has been made."

"Keynesian economics — the go - to theory for those who like government at the controls of the economy — is in the forefront of the ongoing debate on fiscal - stimulus packages. For example, in true Keynesian spirit, Agriculture Secretary Tom Vilsack said recently that food stamps were an "economic stimulus" and that "every dollar of benefits generates $1.84 in the economy in terms of economic activity." Many observers may see how this idea—that one can magically get back more than one puts in — conflicts with what I will call "regular economics." What few know is that there is no meaningful theoretical or empirical support for the Keynesian position."

"I find it amazing now that my first economics class, taught by Alan Sweezy, used John Maynard Keynes’s General Theory of Income and Employment as the textbook. Although this book is one of the most influential works of the twentieth century, it makes a really lousy textbook. Moreover, since I now regard Keynes’s analysis as seriously flawed, it is surprising that I enjoyed the course so much. As a student, I appreciated the simple way that the Keynesian model explained the workings and failings of the overall economy. Especially appealing were the clever policy remedies, such as increased government spending and tax cuts, that Keynes recommended to combat unemployment. Too bad that I discovered later that the model was theoretically and empirically deficient!"

"In contrast to Smith’s incomplete modeling, his follower, David Ricardo, provides a coherent setting— basically, the first macroeconomic model—that can be tested, modified, and applied. Although Ricardo is surely narrower and less imaginative and insightful than Smith, he is also a lot better organized. That is why Ricardo’s analysis of macroeconomics—for example, of the implications of public debt—is more coherent and useful than Smith’s."

"I learned later that economic reasoning was not just mathematics and could be applied to a wide variety of social problems. Now, I think that no forms of social interaction—including religion, love, crime, and fertility choice—are immune from the power of economic reasoning. Hence, even widely held beliefs—for example, that beauty is an illegitimate credential of a worker or that democracy is important for economic growth—are not sacred truths and are subject to analysis."

"My recent work on macroeconomics has stressed long-term issues, including the determinants of long-run economic growth. From the standpoint of fighting world poverty, nothing is more important than figuring out which policies differentiate the fast-growing countries from the slow-growing ones."

"O.K., so what does standard new classical economics say? You should cut the wages of everybody who works for you. Because there are all the people standing outside the factory gates, and they have the same skill set as the people who work for you. You should at least be willing, according to this view, if not to hire them, to say to your own workers, ‘If you don’t take a pay cut, I’m going to replace you with them.’ But one goes around, actually talks to firms, and you’ll find that no firm would do that."

"“As we proceed, we must remember that its trajectory is not predestined"

"An outstanding choice. Tough, smart and principled"

"Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, “Well, how do we define a general liquidity crisis?” Well, it doesn't mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid. She said, “If five banks need to borrow, then it's a general liquidity crisis.” Well, the problem, as she points out, is it's the same three big banks, again and again, and again and again. And these are not short-term loans. She points out that they were 14-day loans; there were longer loans. And they were rolled over, not overnight loans, not day-to-day loans, not even week-to-week loans. But month after month, the Fed was pumping money into JP Morgan and Citibank and Goldman. But then she points out that, or at least she told me, that these really weren't Citibank and Morgan Chase; it was to their trading affiliates. Now this is exactly what Dodd-Frank was supposed to prevent.... So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law."

"So, it is not reporting of individual transactions or anything of the like. And it would be a simple thing for banks and other payment providers to provide along with the other information they’re already providing."

"Democrats are considering a new tax] on liquid assets held by extremely wealthy individuals"

"The Fed has a dual mandate and it is maximum employment and price stability. I think that’s the way it’s phrased in the law"

"In a matter of days, millions of Americans could be strapped for cash.”"

"It is imperative that Congress swiftly addresses the debt limit"

"I felt I wanted to talk about the Fed’s mission, and I wanted to do so in understandable terms, and to emphasize that unemployment is part of our mission. The recession has taken a particularly heavy toll on those who have less education and income—middle-income and low-income families—and the Fed’s concern with the job market is a theme I’ve wanted to get across. Why are we doing all these things that are in the newspapers all the time? I was trying to explain that we’re doing this to help American families who are struggling in the aftermath of the Great Recession."

"[Failing to act could spark an economic catastrophe] Nearly 50 million seniors could stop receiving Social Security checks for a time. Troops could go unpaid. Millions of families who rely on the monthly child tax credit could see delays."

"Economics is a subject that really relates to core aspects of human well-being, and there’s a methodology for thinking about these things. This was a very appealing combination to me. Market systems are capable of massive breakdowns that can result in long, devastating periods of high unemployment. And I felt that economists had really learned something about how to address that."

"[New classical economics] was the starting point for a rightward shift in economics that went against the idea that monetary policy can improve macroeconomic outcomes."

"In Shakespeare's The Merchant of Venice, act V, scene 1, we find this exchange between the two young lovers: JESSICA: I am never merry when I hear sweet music LORENZO: The reason is, your spirits are attentiveThe opening of the finale of Beethoven' s 'Emperor' Concerto provides a splendid example of the kind of theme that is the inspiration for this book. A completely unified theme that hangs together beautifully, it nevertheless portrays vividly a series of contrasting sentiments in a succession that amounts to a small narrative ..."

"The piano is the only keyboard instrument in which one can grandly vary the effects of the harmonics or overtones of a chord at will by balancing the sonority in different ways."

"One of the pupils of Artur Schnabel told me that he never heard his teacher practice a difficult passage slowly, but he was struck by the way Schnabel would play one chord of a slow movement over and over, measuring and remeasuring the different components of the harmony."

"The relation of the performance of music to sound is complex and ambiguous: this is what makes possible Mark Twain's joke that Wagner is better than he sounds."

"The world of Debussy is a seductive oasis, and it is hard to leave it after spending many days immersed in its atmosphere. Playing Debussy-or any other composer with a strong and idiosyncratic personality-affects not only one's cast of mind but the physical disposition as well, the way the muscles work and the fingers come into contact with the ivories."

"The buffoonery of Haydn, Beethoven, and Mozart is only an exaggeration of an essential quality of the classical style. This style was, in its origins, basically a comic one."

"Everything depends, of course, on the shape of the hand, and it must be stressed that there is no type of hand which is more suited to the piano than another. One of the greatest pianists that I ever heard—certainly the most remarkable in his control of the widest possible range and variety of tone color—was Josef Hoffman, who had a hand so small that he could reach no more than an octave; Steinway built him a special piano in which the ivories were slightly narrower so that he could reach a ninth. His friend Sergei Rachmaninov had a very large hand, as did Rudolf Serkin, and Sviatoslav Richter could not only reach a twelfth but could play the last chord of the Schumann Toccata without arpeggiation—an effect which would certainly have astonished the composer. My teacher, Moriz Rosenthal, famous for his technique, had a small hand with stubby fingers; Vladimir Horowitz's fingers were exceptionally long, while Robert Casadesus had fingers so thick that he had trouble fitting them in between the black keys. There is no such thing as an ideal pianist's hand."

"I do not think that any composer has ever asked for octave glissandi on the black keys, but there is a recording by Moriz Rosenthal of Chopin's Black-Key Etude in which he plays the short octave passage in both hands glissando: it hurts my hands just to think about it."

"It was this indifference to the quality of his material that earned Liszt the contempt of his most distinguished contemporaries and of many of the most respectable critics and historians of posterity. It was, nevertheless, his greatest strength. It made it possible for him to manipulate the material ruthlessly, to concentrate on effects of realization with unprecedented intensity, and to integrate styles and techniques of performance into composition in a new way. His invention of novel keyboard effects and his mastery of musical gesture have always been undervalued, especially by pianists of the German school who prefer the kind of music that can be executed while soulfully regarding the ceiling. On the whole, the most genuine understanding of his music has been displayed by musicians of eastern Europe, and he may almost be considered as the founder of Russian pianism."

"Mendelssohn was the greatest child prodigy the history of Western music has ever known. Not even Mozart or Chopin before the age of nineteen could equal the mastery that Mendelssohn already possessed when he was only sixteen. Most astonishing is the nature of Mendelssohn's precocious talent: not only a gift for lyrical melodic lines and delicate, transparent textures, but, above all, a control of large-scale structure unsurpassed by any composer of his generation."

"Schumann is the most representative musical figure of central European Romanticism as much because of his limitations as because of his genius: in his finest works, indeed, he exploited these limitations in such a way that they gave a force to his genius that no other contemporary could attain."

"For Mendelssohn, Beethoven was the new point of departure, and a German composer could not afford to ignore him, as Chopin and Verdi were able to do."