Ran the incentives?

King in SCSUScholars about the proof (or non-evidence), that the stimulus package "work":

Most of what we write about the impact of incentives is simply that, "an effort to gain knowledge." Bureaucrat writes that some numbers. Journalists and bloggers find defects. Impact assessment of econometric models, but those models were used to propose the policy has been implemented. It is unlikely the models will go back and say the proposed plan did not work: econometric models are not built to do this: If the model has as a prerequisite that the future government expenditure will create jobsnot to say that past government expenditure does not. Meanwhile, the political opposition will appear to find inconsistencies, when really there is none. (GDP growth can lead to increased employment.) And people angrier and cynical.

There is nothing wrong with saying we do not know. This might have worked. This may not have. What we know is there are between three and four million fewer jobs than last year, the deficit is larger. We want to know more. Try to know more. And if the volume of studies since 2000, the great recession is any indication, we will still want to know more than a century now.

Excellent stuff. I agree wholeheartedly with King-a few items that can be gained directly from the statistics. There is no shame in saying that we are not sure. Because direct evidence is not necessarily so spotty, theory is important. An analysis of the theory behind fiscal stimulus shows that, as is the theory is constructed, it is not possible to work in the real world for anything but very serious crises.

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