There is no r*
Like many economists, I have been trapped into thinking that there is an equilibrium real rate of interest - a level of the policy rate consistent with stable inflation, a closed output gap, or full employment....
Brexit: everyone got it wrong
'Brexit' means brexit. Why do I have a feeling some Leavers will end up saying 'we never left', and some Remainers will say the same. The opposite is also likely. Some Leavers and Remainers will agree: Brexit d...
There is no shortage of safe assets – a short proof
Safe assets are bunds, treasuries, gilts, JGBs and other government bonds issued by large developed economies. In one sense, they actually are ‘safe’ assets. They are typically negatively correlated with risk a...
Institutions matter
Definitions of Money, Economic History, Helicopter Money, Monetary Policy, Money in Europe, Theory & Other Problems
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The monetary & fiscal distinction revisited
Monetary policy involves changes in the supply of base money and is carried out by central banks. Fiscal policy involves taxation, spending and transfers carried o...
Eight pitfalls to avoid in the helicopter money debate
Learn first, then teach
Professors Stephen Cecchetti and Kermit Schoenholtz are the latest to opine on the subject of helicopter money. It is worth quoting from their opening paragraphs, it frees me up to re...
The Best of Brexit
The Best of Brexit
Perhaps the best thing to have come out of Brexit has been the writing. So here is a collection of my personal favourites. There are serious omissions - so feel free to suggest additions i...
Monetary policy: transparency or obfuscation?
We live in a era where monetary policy is more transparent than ever - if measured by press conferences, publication of minutes and individual policy-makers forecasts.
At the same time, the behaviour of cent...
A brief reply to Paul Krugman on policy equivalence, h/t Brad DeLong
Brad DeLong has revived an old piece by Paul Krugman on helicopter money (HM), which is correct in one sense, but I also think completely misses the point.
Cutting to the chase, I recently attended a very au...
Fiscal policy: a brief reply to Duncan Weldon
Duncan Weldon has written a very perceptive blog, arguing that helicopter money is ‘a solution in search of a problem’ - what we really need is effective fiscal policy. In one sense, Duncan is spot on. A smart ...