Second Reply to Bergh

I AM PLEASED THAT IN HIS SECOND COMMENT ANDREAS BERGH (2006b) has decided to “try even harder to recur to the facts,” and agrees that on the key econometric front our “actual disagreement is very small”. He also now reveals that he is “in fact rather friendly to the welfare state.” We seem to have achieved some convergence. Still, he retains some lingering disagreements with my analysis, and two main disagreements deserve to be noted briefly.