Zach Gochenour and Alex Nowrasteh – two of the finest young scholars ever to have studied economics at George Mason University – have an important new study out, from the Cato Institute, on the effects of immigration on the size of the U.S. welfare state. Summary: There’s no effect. (HT Bryan Caplan)
John Taylor again challenges the “secular stagnation” hypothesis. Here’s a slice from Taylor’s post:
I have been arguing for a long time that the slowness of the recovery, as well as the deepness of the great recession before that, were likely due to a significant shift in economic policy away from what worked reasonably well in the decades before. Broadly speaking, monetary policy, regulatory policy, and fiscal policy each became more discretionary, more interventionist, and less predictable in the years leading up to the crisis.
The explanation fits the facts well. There is a clear empirical association between the poor economic performance and this shift in economic policy.