SO true. "Oh noes I don't know how we're going to rearm we've only got one of the world's great industrial powerhouses looking for a new growth area whose government can borrow very cheaply, woe is us".

To better compare Ukraine aid to defence spending, I turned the @kiel.institute figures into annual % of GDP, using the latest GDP data available and some extrapolation.

... and I say this as someone who has contributed to developing such linearization methods myself benjaminmoll.com/WIMM/.

Of course these methods are very useful for answering some questions. But just not for many others. (Plus the downsides in Fatih's thread)

@benmoll.bsky.social might have an opinion inspired by his work on rational expectations in HA model (benjaminmoll.com/challenge/)

For the one interested, @benmoll.bsky.social will present @igier @bocconi on Tuesday at 4.30pm