Monday, November 20, 2006

Robert Barro Right, Gary Becker Wrong, Can it be Real?

" In a 1973 workshop, I presented my paper, published in the 1974 Journal ofPolitical Economy, about Ricardian Equivalence for budget deficits. (In the model, taxesand budget deficits had equivalent economic effects, along the lines expressed by theclassical British economist David Ricardo. However, I should mention that no one in the1973 workshop noted the connection between my paper and Ricardo.)

This was the onlytime I witnessed a seminar attended simultaneously by the three great pillars of theChicago School—Milton, George Stigler, and Gary Becker. At one point, Gary and I gotinvolved in a heated dispute on a technical point in the paper. I recall Milton putting hishead down, deep in thought for at least a full minute, while the room was silent. Given Milton’s mental quickness, this prolonged deliberation was quite unusual, and there wasan atmosphere of thick tension in the room.

Finally, Milton lifted his head and declared,in an incredulous way, that Gary was wrong (a nearly unprecedented event) and that I was therefore right. For some reason, Gary lacks any recollection of this event."

Read on Bob Barro's recollection here, also make sure you scroll down to the very end of the paper where you will two extremely nice pics of M.F., one with him standing patiently waiting for his traffic ticket!

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