A question about the exact science stuff before going back to policy questions. One of the things for which you are most famous is for writing the Foundations of Economic Analysis, which as I understand it attempted to bring a kind of mathematical uniformity to the field --

Well, I would say a mathematical searchlight --

Okay, what's the distinction there? I'm curious what you think about some recent developments in economics, some of the movements that are hot right now -- like behavioral economics, part of which wants to challenge the notion of humans as utility maximizing rational agents.

In my view behavioral science describes an extremely large and important part of the modern picture. However, whenever the economy turns in a very irrational way, that can create opportunities for very rational speculators to make a profit. So you can still get some approximation on the micro level of an efficient market. But there never has been a true macro efficient market. You just have to look at the record of economic history the ups and downs. Bubbles are self-generating.

And I'm not sure most of the people that get caught up in the middle of a bubble can be described as irrational. It seems pretty rational to buy a house and flip it in the next few weeks at a profit when that's been happening for along time. It works both ways.

The crowd mentality is maybe not rational.

Well, let's put that differently. It's not optimal. It's what it is. You have to cope with people. Now, if all the people had gone to the Wharton School and become very sophisticated that doesn't mean the society in which they lived and operated would be incapable of having a business cycle or bubbles. They're self generating.

So are people utility maximizing and rational and can we make sense of interpersonal comparisons of utility in a mathematical way?

No. But you know, people say, 'greed has suddenly increased.' But it isn't that greed's increased. What's increased is the realization that you've got a free field to reach out for what you'd like to do. Everybody would still like to retire with a satisfactory nest egg in real terms. And the tragedy of this unnecessary eight-year interlude is that much of what has been accumulated is gone and gone forever. And no amount of pumping is going to bring back into reality what were ill-advised overextensions of bridges to nowhere and housing developments for which there was no effective demand.

With the Foundations, I looked around for the best bicycle in town. It wasn't perfect, but it was better than what had been assigned previously.

An Interview With Paul Samuelson, Part Two - The Atlantic



…その特徴は何でしょう? 私が知りたいのは、貴方が最近の経済学の展開、今注目を浴びている動きについてどう思っていらっしゃるか、ということなんです。たとえば行動経済学ですが、これは、効用を最大化する合理的存在として人間を捉える見方に挑戦しようとしている面があります。








Back to some middle-term and long-term policy questions. Even if it makes sense to think about deficit-financed government demand stepping in and replacing a drop off in household demand, do you worry about the rising deficit and the potential risk of inflation? There's been a lot of articles on this in the past two weeks -- Paul Krugman and Niall Ferguson and others.

I think it would be surprising if, down the road -- not in the long long run but in the somewhat short run -- we don't have some return of inflation. On the other hand, I'm of the view that if we come out of this with some kind of temporary stabilization at least, and the price level is let's say 10-12% above what it was before we got into the meltdown, I think that's a price I would be willing to pay!

Unfortunately, after World War One -- in 1925 when the British tried to put the pound back to the 1914 level against Keynes advice -- it turned out that Keynes was very right and a lot of the subsequent grief in the British empire traces to that wrong decision. I'm against inflation, but what I worry about is continuing, galloping, self-reinforcing inflation. I would not try to roll things back to some sacred earlier price level.

An Interview With Paul Samuelson, Part Two - The Atlantic

中長期の政策に関する質問に戻ります。財政赤字による政府需要によって経済に介入し、家計需要の落ち込みを補う、という考えが正しいとしても、赤字の増大とインフレの潜在リスクが気になりませんか? 過去2週間でこの件に関する記事がたくさん出ました。ポール・クルーグマンとか、ニーアル・ファーガソンとか、その他の人々による記事です*1



And China .. You've written some about that. How real do you think the threat of a run on the dollar is? Some people, like your nephew Larry Summers has said that there's kind of "balance of financial terror" there -- that it's not in China's interest to see a big decline in the value of dollar denominated assets.


Certainly, some of the reasons the Chinese have stuck with huge amounts of reserves in very low interest rate US assets has been to keep the export led program that they espouse in existence. They can still succeed there by taking the reserves out of prime zero-interest stuff and putting it in our general stock market and so forth, the way Dubai and some of the other countries are beginning to do. So I think we've got -- in the long term -- a lull in our favor, but it's a lull in our favor that, rationally, is probably not going to persist.

An Interview With Paul Samuelson, Part Two - The Atlantic

それから中国についてですが…。貴方は中国について書かれました*3。ドルからの逃避の恐れはどの程度現実的だとお考えですか? ある人々、たとえば貴方の甥のラリー・サマーズは、「金融での恐怖の均衡」があると言いました。ドル建て資産の価値の大幅な下落は、中国の利益にはならない、というわけです。



*1:cf. これ