The economics of Christmas, a holiday satire
What if some of the biggest names in economics and econ-blogging got into a fight about Christmas? It might go a little something like this.
The Christmas equivalence theorem
By Robert Barro, Wall Street Journal
While it's understandable that young people across America hope that their lives will be enriched by a sudden influx of toys and sugarplums on December 25, it is incumbent on grown-ups to realize the truth about this Keynesian scheme.
It has been demonstrated time and again that Christmas cannot add to the store of toys of the nation or even a single household.Households experiencing a surge in gifts on Christmas day compensate by withholding gifts in the future. That is, gifts that are "spent" on Christmas are saved during the remainder of the year. So each Christmas gift isn't really so much given as borrowed from the future.
Sorry kids, Santa isn't so much bringing you presents as stealing presents you would have received in the future.
Rudolph's Ruddy Nose (Wonkish)
By Paul Krugman, New York Times
Joe Weisenthal has a terrific take on the growth of unemployment in the North Pole. As is well known, reindeer unemployment has surged. Yet the Very Serious Elves who promised that sleigh austerity would rapidly bring growth back to the Pole have learned nothing.
But it's not just the elves. Even economists, who should know better, go on insisting that we need to shrink Santa's route now despite high reindeer unemployment. Some continue to insist that there just is a skill mismatch in the Pole economy, so that we have no choice but to allow the diminutive Rudolph resources go unemployed. This truly is the dark age of North Pole economics.
Imagine for a moment that the pole suffered from an immense foggy night. Everyone would agree in that case that we could put Rudolph's red nose to good use. I know it drives people crazy when I mention that a crisis can be good for aggregate demand—but everyone who disagrees with me is already crazy, so who cares?
Santa Claus is inflating away the future of Christmas
By Niall Ferguson, Financial Times
In the course of history there have always been those who believed that we could celebrate Christmas in perpetuity. And every time, without fail, the Christmas program has run up against the hard reality of inflation. You just cannot expect that producing all those gifts out of the ether will not diminish the value of all the gifts that have come before and all those that shall come after.
The truth about Christmas and Inflation
By Josh Barro, Business Insider
Niall Ferguson writes: "You just cannot expect that producing all those gifts out of the ether will not diminish the value of all the gifts that have come before and all those that shall come after.
Niall Ferguson is a jerk.