Thursday, January 14, 2010

Stein's law modified

Krugman cites it: If something can't go on forever, it will stop. True.

Also true:

Even if something can go on forever, it will stop eventually.
Even if something can't go on forever, it can go on for a very long time.

One might say the difference between these corollaries and Stein's original is the difference between a real-world, historical approach to macro and the equilibrium approach of the mainstream. Fresh or salty, it's all water "when the storm is past and the ocean is flat again..."

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