How Labour should respond to Corbyn
Jeremy Corbyn’s rise to prominence is revealing. It shows a Labour party bereft of intellectual leadership. Politics is crying out for inspiring policies - ambitious, radical policies, which positively address ...
A simple refutation of raising the inflation target
Premises:
Inflation falls if there is significant spare capacity.
If the central bank can consistently hit its inflation target there is no spare capacity.
If there is no spare capacity, there is no p...
A brief reply to Bank Underground
Fergus Cumming at the Bank of England has written this blog on the subject of helicopter drops.
It is encouraging that the Bank is discussing the matter, but unfortunately the references are too narrow and t...
Ricardian equivalence: another reason why fiscal policy works
Sometimes the obvious is hard to perceive. Debate about "Ricardian equivalence" may be missing the obvious: forward-looking, ‘rational’ households should expect fiscal policy to work, and their future incomes t...
Reply to Brad (Part II) – Pigou, Haberler, Friedman v Hicks, Hansen, Krugman
I agree with Brad DeLong that Paul Krugman has correctly diagnosed most of the big global economic calls since the mid-1990s. My beef is with his policy prescription.
The issue at stake is how to get out of a ...
Keynes and Friedman are always right: a reply to DeLong & Krugman
Brad DeLong has an interesting rule of thumb: if you want to understand the economy since the mid-1990s, Paul Krugman is always right. And if you ever think he's wrong ... Don't.
I disagree, and a detour into ...
Taxis, coffee, and another broken equation
Standard macroeconomic models are premised on the assumption that recessions occur because of “nominal rigidities” in wages and prices.
I’ve never found this convincing. Economists observe that quantities move...
Does the central bank’s balance sheet matter?
A growing number of economists are advocating granting central banks the power to make payments to households. Brad DeLong puts it in historical context, bemoaning the failure of the “social credit” politicians...
The latest debate over UK fiscal policy is a distraction
Debate on post-crisis fiscal policy in the UK seems to have taken an odd turn, in no small part thanks to Niall Ferguson’s successful attempts to wind-up the British economics community. Ferguson’s approach...
Austerity, inflation, and a fictional bond panic
In response to recent posts from Simon Wren-Lewis, Paul Krugman and myself, Tony Yates has expanded on his defence of the principle of tightening fiscal policy in the aftermath of the financial crisis.
He prov...