Who Were the Sea Peoples?

Scott Sumner is triumphant about the April jobs number. Monetarism has apparently now been as good as proven. Can you imagine someone from the natural sciences putting forward a claim that a rival school (in Sumner's case, Keynesians) had been entirely vanquished on the basis of similar evidence? Biologist Will Wintner: I have empirical evidence proving the rival school of cancer cell mutation wrong! I am triumphant! Journal Editor: Ah, so this evidence is from repeated, duplicable laboratory experiments with tight environmental controls? BWW: Well, no... JE: Oh, clinical trials, then, dozens of them with hundreds of cases each and well-designed control groups? BWW: Not exactly... JE: So what is this evidence? BWW: Well, I'm pretty sure I saw the mutation happening the way I think it does in nature. JE: No control group to compare to? BWW: Nope. JE: No scientific control of the environment? BWW: None whatsoever. JE: Yes, and how many times did you see this happen? BWW: Just o...

But without need! Bob writes: "But what of the second part of Sumner’s quote, where he says: 'The huge decline in house prices between 2006 would not be expected to cause a major recession, and indeed would not have caused one had NGDP not declined.'" "I still say there’s something really screwy about this approach. Absent huge swings in the price level, a recession is the same thing as a drop in NGDP." I believe Sumner thinks like this: In Year 1 (Y1) we have an economy going along nicely, RGDP growth (R) = 3% and NGDP growth  (N) = 5%. In Y2 there is, say, a supply side shock, dragging R down to -1%. But the Fed does its job and, with 6% inflation, keeps N at 5%. Because of the Fed's action in Y2, in Y3, the economy rebounds, with R = 4% and N = 5%. If the Fed had allowed N to drop to 1% (if inflation had stayed the same) or even lower (if the shock had increased liquidity preference) then the economy might have been mired down for several...