A small piece of anecdotal evidence for our readers. Last Thursday, Charles Calomiris posted on VoxEU that governments needed to directly buy up bank shares; Krugman (PROPS) had made the same argument. In case you hadn't heard, the Treasury announced today that they will do exactly that. Was Paulson responding to academic opinion?
Certainly the UK's (and other Europeans') decisions to buy direct stock in banks influenced the US decision but when the "innovators" of Wall Street land us in a sea of trouble, government officials have incentive to take the advice of more tempered minds from the halls of academia, even when the man implementing the plans is a Goldman alum. But whether this represents a permanent shift toward a more intellectually founded economic policy is a much different question. I'm leaning towards this being the case based on my opinion that the explosion of economics blog and popular writing on the dismal science has fundamentally shifted the way economics is viewed by laymen and policy wonks alike. Readers, what do you think?
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