GOOD regulations should be implemented whenever possible. If they are good, they will raise confidence among the public and the business community that the government knows what it's doing. That can only be a positive for the economy's performance. So I would not gear regulation to the business cycle.

ASSESSING countercyclical fiscal policy's efficacy presupposes there is a well defined measure of countercyclical policy. One measure is the level of government consumption. In the case of the US, federal government consumption as a share of national income rose significantly between 2007 and now, but primarily offset the decline in state and local government consumption as a share of national income. In total, government consumption rose from 19.0% of national income in 2007 to 19.4% last year. That's not a lot of stimulus on which to base a judgment about the utility of countercyclical fiscal policy.

As for running deficits, no economist worth his degree thinks the deficit is a well defined measure of anything, let alone fiscal policy. That may be a small number of warm bodies, but so be it. The problem, as I've written in this space repeatedly, is that how one labels monies the government takes in and pays out will determine what deficit is reported and that there is nothing in economic theory that pins down this choice of nomenclature. Our theory doesn't tell us to talk about it using German rather than English, and it doesn't tell us whether to call particular receipts "taxes" or "borrowing", and particular payments "repayment of principal and interest" or "transfer payment".  From the perspective of our theory, we're completely free to choose our fiscal labels (as long as each set of labels is internally consistent) however we want and, therefore, we're completely free to announce/measure any size deficits for past years that we want. The government's choice of language is not blessed by an economics God. No such God exists. And if she did, she'd have no basis for choosing one set of words over another.

THE Eichengreen, Park, and Shin paper makes a convincing case for a slowdown in China's growth in the years ahead. But China also has many years of high growth ahead. Whether China reaches its destination more slowly or not, that destination is the world's largest developed economy. Indeed, in this paper, my co-authors, Sabine Jokisch of Ulm University and Hans Fehr of the University of Wuerzberg, and I simulate the global transition path taking into account a major slowdown in China's growth rate as its technology catches up to ours and as its rapid aging slows the growth of its labour supply. Still, by 2030, which is when today's newborn Americans will start joining the labour force, China's economy is 80% larger than America's and new cohorts of Chinese workers are earning close to what their American counterparts are earnings. 

WHAT we've seen and heard in this nuclear crisis could be a Monty Python skit were it not so tragic and grave:

“Oh, and we’ve had a bit of a problem in another reactor. An explosion, actually, but anticipated, and it’s just the reactor housing, not the containment vessel, well, except for some small cracks in the vessel, well, big cracks, but not to worry, the radiation escaping is minor, think lots of dental x-rays, the cancer risk hasn’t changed much, and it’s years off, and, hum, one other thing, we’re seeing a fire in a pod at reactor 4 that’s holding 250 tons of spent fuel, but the fire trucks are hosing them down, and, …”

And Tokyo Electric's President's, Masataka Shimizu's, formal apology "for causing such a nuisance” takes the cake.

Once the Japanese think things over, I expect they will make the right decision, namely to shut down all 55 of their current reactors and cancel the 11 new reactors they have planned.