2021年9月3日 星期五

Wonking Out: A very Austrian pandemic

Friedrich Hayek gave terrible policy advice.

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Paul Krugman

September 3, 2021

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Friedrich HayekBettmann Archive/Getty Images
Author Headshot

By Paul Krugman

Opinion Columnist

Remember Austrian economics? In the aftermath of the 2008 financial crisis, a number of conservatives rejected Keynesian economic prescriptions and claimed instead to be devotees of the Austrian School, especially Friedrich Hayek.

It's questionable how many of these self-proclaimed "Austrians" actually knew what they were endorsing. In general, when right-wingers talk about intellectual history, you want to fire up your fact-checking. For example, Mark Levin of Fox News has a best-selling book claiming not just that the current American left is in the thrall of European Marxists but more specifically that they're followers of Herbert Marcuse and the Frankfurt School — except that he keeps calling it the "Franklin School."

And the idea that there was a titanic intellectual battle in the 1930s between Hayek and John Maynard Keynes is basically fan fiction; Hayek's views on the Great Depression didn't get much intellectual traction at the time, and his fame came later, with the publication of his 1944 political tract "The Road to Serfdom."

Nonetheless, there was an identifiable Austrian analysis of the Depression, shared by Hayek and other economists, including Joseph Schumpeter. Where Keynes argued that the Depression was caused by a general shortfall in demand, Hayek and Schumpeter argued that we were looking at the inevitable difficulties of adjusting to the aftermath of a boom. In their view, excessive optimism had led to the allocation of too much labor and other resources to the production of investment goods, and a depression was just the economy's way of getting those resources back where they belonged.

This view had logical problems: If transferring resources out of investment goods causes mass unemployment, why didn't the same thing happen when resources were being transferred in and away from other industries? It was also clearly at odds with experience: During the Depression and, for that matter after the 2008 crisis, there was excess capacity and unemployment in just about every industry — not slack in some and shortages in others.

This time, however, is different. Although we aren't hearing much about Austrian economics these days, the pandemic really did produce an Austrian-style reallocation shock, with demand for some things surging while demand for other things slumped. You can see this even at a macro level: There was a huge increase in purchases of durable goods even as services struggled. (Think people buying stationary bikes because they can't go to the gym. Hey, I did.)

A very weird slump.FRED

You can see it even more clearly in the details: Record vacancies in the market for office space, a crippling shortage of shipping containers.

So we're finally having the kind of economic crisis that people like Hayek and Schumpeter wrongly believed we were having in the 1930s. Does this mean that we should follow the policy advice they gave back then?

No.

That's the message of a paper by Veronica Guerrieri, Guido Lorenzoni, Ludwig Straub and Iván Werning that was prepared for this year's Jackson Hole meeting — an important Federal Reserve conference that often produces influential research. (Fun fact: I've been blackballed from Jackson Hole since the early 2000s, when I had the temerity to criticize Alan Greenspan before it was fashionable.) Guerrieri et al. never explicitly mention the Austrians, but their paper can nonetheless be construed as a refutation of their policy prescriptions.

Hayek and Schumpeter were adamantly against any attempt to fight the Great Depression with monetary and fiscal stimulus. Hayek decried the use of "artificial stimulants," insisting that we should instead "leave it to time to effect a permanent cure by the slow process of adapting the structure of production." Schumpeter warned that "any revival which is merely due to artificial stimulus leaves part of the work of depressions undone."

But these conclusions didn't follow even if you accepted their incorrect analysis of what the Depression was all about. Why should the need to move workers out of a sector lead to unemployment? Why shouldn't it simply lead to lower wages?

The answer in practice is downward nominal wage rigidity: Employers are really reluctant to cut wages, because of the effects on worker morale. Here's the distribution of wage changes in 2009-10, from the linked paper:

Distribution of wage changes, 2009-10.Fallick et al

The big spike at zero represents large numbers of employers who had an abundance of job applicants but didn't want to cut wages, so they just left them unchanged.

However, if wages can't fall in the sector that needs to shrink, why can't they increase in the sector that needs to expand? Sure, it would lead to a temporary rise in inflation — but that would be OK.

Guerrieri et al. argue, with a formal model to back them up, that the optimal response to a reallocation shock is indeed a very expansionary monetary policy that causes a temporary spike in inflation. Workers would still have an incentive to change jobs, because real wages would fall in their old jobs but rise elsewhere. But there wouldn't have to be large-scale unemployment.

Maybe this was obvious from the start — or maybe not, because most of us were so focused on the wrongness of the Austrians' diagnosis of the problem that we didn't spend much time thinking about their solution. Now that we've finally had the shock Austrian economists kept imagining, we can see that they were still giving very bad advice.

And in case you're wondering, the Fed, by accepting transitory inflation, is getting it right.

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2021年9月1日 星期三

The T List: Six things we recommend this week

Home décor from Dolce & Gabbana, a Brutalist eatery — and more.

Welcome to the T List, a newsletter from the editors of T Magazine. Each week, we share things we're eating, wearing, listening to or coveting now. Sign up here to find us in your inbox every Wednesday. And you can always reach us at tlist@nytimes.com.

VISIT THIS

Art Deco Splendor in the City of Light

Left: a Deluxe Junior Suite at the Cheval Blanc Paris. Right: a table at its Plénitude restaurant.Alexandre Tabaste

By Noor Brara

T Contributor

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Located in the heart of the city, the new Cheval Blanc Paris has 72 rooms, with balconies or winter gardens looking out either on the Pont Neuf or the picturesque rooftops of the 1st Arrondissement and beyond. The hotel, set in a 1928 Art Deco building designed by Henri Sauvage and reimagined by the architect and interior decorator Peter Marino, feels like a grand but familiar home, with sculptural chandeliers by Philippe Anthonioz, engraved metallic tables by André Dubreuil and wood sideboards by Charlotte Perriand. Guests are surrounded by art, including works by Claude Lalanne and Vik Muniz, while the property has no fewer than four restaurants: Limbar, a café and bar offering light-as-air pastries by Maxime Frédéric and a cocktail program by Florian Thireau; Le Tout-Paris, a not-so-classic brasserie; the more formal Plénitude, with the Michelin-starred chef Arnaud Donckele at the helm; and the fourth will be the seafood restaurant Langosteria's first outpost outside of Italy. In between meals, guests might sit in the terrace garden or take a dip in the indoor pool, which features an aqua-colored mosaic by the Munich-based artist Franz Mayer and, at 30 meters long, is the largest in town. chevalblanc.com.

STEP BY STEP

Jessica Richards's Beauty Regimen

Left: Jessica Richards, founder of Shen Beauty. Right (clockwise from top left): Joaquina Botanica Hydrating Essence, $54. Supracor Stimulite Bath Mitt, $36. Augustinus Bader The Body Cream, $165. Nécessaire The Body Exfoliator, $30. Manta hairbrush, $34. Bynacht Nocturnal Signature Anti-Age Cream, $205. Vyrao Witchy Woo, $190. Irene Forte Almond Cleansing Milk, $89. Virtue The Polish Un-Frizz Cream, $40. Ideo Skin Memory Serum, $175. All available at shen-beauty.com.Portrait: Yumi Matsuo. Products: courtesy of the brands.

Interview by Caitie Kelly

For this month's installment of the T List's beauty column, which details the products and treatments that creative people swear by, Jessica Richards speaks about her daily routine.

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For my morning shower I use Necessaire's Body Exfoliator with the Supracor Stimulite Bath Mitt — it's a loofah and dry brush in one — Christophe Robin's Brightening + Clarifying Shampoo (which they are discontinuing, so I'm not sure what I'll do!) and Virtue's Recovery Conditioner. I have incredibly dry skin, so when I dry off I leave it a bit damp and rub in a bit of Olverum's Body Oil and then Augustinus Bader's Body Cream. I brush my hair with a Manta hairbrush — Shen, my beauty store, debuted it recently; it's the best thing on the planet: The more you use it, the less your hair falls out — and comb in a tiny bit of Virtue's Un-Frizz Cream before putting it in a bun. I don't wash my face in the morning, I just rinse with water. Then I apply Irene Forte's Helichrysum Hyaluronic Toner and the Skin Memory Serum from Ideo, which we just launched. Going into fall, I'll start using Bynacht's Nocturnal Signature Anti-Age Cream (yes, even during the day). For makeup, I use Eye Love You Mascara from Westman Atelier and a lipstick from Maarks Lip in Rouge unless I'm wearing a mask, then I'll wear Cherry Chapstick. I always go back to Bobbi Brown's Long-Wear Gel Eyeliner in black; it goes on easily and doesn't smudge. I like eyeliner underneath my lashes so that it adds a bit of definition. We have a service at Shen called Multeye: tattooing underneath your lash line, a brow wax, tint and a few microblading strokes. I do it every nine months. For fragrance, I'm obsessed with Dirty Grass from Heretic and Witchy Woo from Yasmine Sewell's new brand Vyrao, which will be available at Shen this month. At night, my number-one priority is to get all the dirt and grime off with a foaming cleanser like Youth to the People's Superfood Cleanser or Reflekt's Daily Exfoliating Face Wash, and then I apply an oil or balm cleanser. Irene Forte's Almond Cleansing Milk is super-calming, but I also love Joaquina Botanica's Hydrating Essence. For serums, I go super-heavy. I use Ideo at night too — if you use it twice a day, you really see the results. After that, I layer on something like the Supernal Cosmic Glow Oil or Pai Carbon Star if I feel like I might be getting a bit of a breakout. I like Dr. Barbara Sturm's Eye Cream — I have very sensitive eyes, and it doesn't have any added fragrance. Finally, I use MBR's Cream Extraordinary; I need as much hydration as I can get. I layer and coat and go to bed looking like a glazed doughnut.

This interview has been edited and condensed.

SHOP THIS

La Dolce Casa

From left: Dolce & Gabbana Casa's Carretto chair with brass fittings and handblown Murano-glass goblet.Courtesy of Dolce & Gabbana

By Zoe Ruffner

T Contributor

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When Domenico Dolce and Stefano Gabbana began self-isolating in Milan at the start of the Covid-19 outbreak last spring, the fashion designers found themselves turning their attention to their immediate surroundings. "We kept coming back to the idea of the home as the most important space," say the couple, who spent the time dreaming up Dolce & Gabbana Casa, the brand's first décor range. It was partly inspired by the work of some of their favorite talents, including Paul Evans and Gio Ponti ("I collect furniture I love; it's my only vice," says Dolce). The end result, though, which was unveiled this past weekend ahead of the brand's Alta Moda show in Venice, is entirely their own — and is deeply rooted in Italian craftsmanship. Four of the brand's iconic motifs appear throughout the line, as with a leopard-print armchair and matching side table, a comfy-looking couch reminiscent of blue-and-white Maiolica and various desk accessories that feature a print depicting a traditional Sicilian horse-drawn cart. dolcegabbana.com.

SEE THIS

Noguchi's Greek Inheritance

Objects of Common Interest's "Tube Light I" (2019) at left and "Tube Light II" (2019) at right, installed among Isamu Noguchi's basalt and manazaru stone sculptures.Photo: Brian W. Ferry. Artworks © Objects of Common Interest and © The Isamu Noguchi Foundation and Garden Museum/Artists Rights Society.

By Kurt Soller

Two or so years ago, when the 39-year-old designers and architects Eleni Petaloti and Leonidas Trampoukis of the cerebral design studio Objects of Common Interest learned of the 20th-century Japanese American artist Isamu Noguchi's connection to their native Greece — he once described it as his "intellectual home" — they were immediately inspired. The couple, who split their time between New York City and Athens, began researching the digital archives of the Noguchi Museum in Long Island City, Queens, to create an online feature and a forthcoming set of books on Noguchi's Greek influences. Now this aesthetic fascination has been brought to life with "Hard, Soft and All Lit Up With Nowhere to Go," a new exhibit organized by the Noguchi Museum's senior curator Dakin Hart, opening on September 15. By blending OoCI's playful objects (tubular lights and chairs, arcing cobalt formations, massive transparent inflatable sculptures that wobble in the wind) with Noguchi's own pieces, the show creates deep connections — between eras, places and creatives; between the increasingly blurry fields of art, design and architecture — that speak above all to the power of constant cultural exchange. "Between Noguchi and ourselves, we're both examining concepts like light, weight and volume," Petaloti says, "but we're answering in different ways." noguchi.org.

EAT THIS

Cavernous Cuisine

Forest restaurant at the Paris Museum of Modern Art.Alexandre Tabaste

By Gisela Williams

T Contributing Editor

The 27-year-old architect Julien Sebban, founder of the French design collective Uchronia, had a postapocalyptic vision when he visited the site of the Paris Museum of Modern Art's future restaurant, Forest, a couple of years ago. A remnant of the 1937 Universal Exhibition, the high-ceilinged concrete space looked to him like a subterranean Brutalist lair. Sebban and his team decided to embrace the atmosphere, creating a bunkerlike agora with surfaces of polished concrete that become rougher the farther one ventures within. The overall effect, however, is one of warmth and comfort, with walls covered in a thicket of vines and mossy boughs and the soft glow of moonlike volcanic-stone sconces. Though Forest might look like the end of the world, Sebban says, it's actually a "really nice place to be." forest-paris.com.

GIFT THIS

The Scent of Palace Intrigue

Left: the full cast of characters in Ginori 1735's La Compagnia di Caterina. Right: the Lover candles.Matthieu Lavanchy

By Eleonore Condo

T Contributor

The inspirations behind Luca Nichetto's designs for Ginori 1735's first home fragrance collection, La Compagnia di Caterina, are as multilayered as the scents. Though the theme is the court of Catherine de' Medici, the infamous queen credited with introducing perfume to the French when she brought her perfumer with her to Paris from Florence, Nichetto was also influenced by lucha libre masks, Baz Luhrmann's "Romeo + Juliet" and ­­Jean-Paul Goude's portraits of Grace Jones. "A lot of my loves are in this project," he says. The result is a boldly designed collection of scented candles, incense burners and room diffusers with fragrances by Jean Niel, the oldest perfume house in France. Each item is cast in the form of one of eight archetypal courtiers, including the Lover and the Scholar, and nearly all can be refilled with the same or different scent, creating what the company calls an "afterlife." From $90, ginori1735.com.

FROM T'S INSTAGRAM

Where the Props Live

An image from Jasper Fry's exhibition "Prop Houses" at Act One Cinema in London.Jasper Fry

Over the past months, the British photographer Jasper Fry has made trips to a loose scattering of warehouses located mostly on the outskirts of London. Filled with everything from Victorian furniture to out-of-date medical equipment to neoclassical busts, these are the city's prop houses, repositories of objects used in film and television. Each is constantly in flux, as pieces are checked in and out. "They're conveyor belts," says Fry. "No room is the same from one week to the next; I liked that transience. However, they're also curated to appeal to the eye." He was drawn, too, to their unique themes. A prop master might visit one for its collection of midcentury American jukeboxes, another for its array of replica Ming vases. There are few things that can't be found. "Each has its own idiosyncrasies," says Fry, "from the grand passages lined with suits of armor in Farley, to the creaking townhouse floorboards of the Lacquer Chest and the constructed hospital walls of Curious Science. They're much more than simple display vessels; they reflect decades of research and care." His images of six prop houses will be on display in an exhibition at Act One Cinema in London from Aug. 27 until Sept. 5. For more, visit tmagazine.com — and follow us on Instagram.

Correction: Last week's newsletter misstated the frequency with which the magazine Mother Tongue is published. It is biannual, not quarterly.

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