According to an analysis by University of Massachusetts professor Gerald Friedman, Bernie Sanders’ proposed economic policies would result in average annual output growth of the US economy of 5.3% over the next decade,
Economists Krueger, Goolsbee, (Christina) Romer and Tyson, initially disputed the projections in an open letter to Sanders and Friedman.
Paul Krugman has used the letter as a starting point to savage the Friedman analysis in a series of NYT blog posts.
Friedman responded with his own letter in part charging that
[T]he CEA-chairs’ letter: substitut[ed] attack language and ad hominem argument for reasoned discourse. If you had taken the time to read my paper, you would find, as others have, that I evaluate the Sanders program using standard assumptions and methods. Rather than jumping on my conclusion, a more constructive discussion would focus on identifying possible errors in my method that may have led to conclusions that may seem implausible. Certainly, we can agree that it is illogical to reject conclusions without finding fault with method.Now, one of the authors of the original letter, Christina Romer and her husband David Romer and responded with a detailed critique.
The bottom line of our evaluation of Professor Friedman’s analysis is that it is highlyBoth sides here are, of course, using extremely problematic Keynesian models, but it still is fun to see them rip apart each others shaky models.
deficient. The estimated demand-induced effects of Senator Sanders’s policies are not just
implausibly large but literally incredible. Moreover, even if they were not deeply flawed,
Freidman’s enormous estimates of demand-fueled growth could not and would not come to pass. Even very generous estimates of the amount of slack still present in the American economy would not be enough to accommodate demand-driven growth of anything near what Friedman is estimating. As a result, inflation would soar and monetary policy would swing strongly to counteract them. Finally, a realistic evaluation of the impact of Senator Sanders’s policies on productive capacity (something that is neglected in Friedman’s analysis) suggests that those impacts are likely small and possibly negative.