Nothing is permanent
To borrow a disparaging phrase from Paul Krugman, the concept of 'permanence' in economics seems “to have a special ability to create intellectual confusion, even in smart people.”
Personally, I don't reall...
The BoJ has started helicopter drops
Oddly, some economists think that helicopter drops are either beyond the capacity of central banks or highly unlikely. Neither is true - they have already started.
It is now clear that the Bank of Japan is e...
Legal helicopter drops in the Eurozone
Helicopter drops in the Eurozone may be a legal obligation of the European Central Bank (ECB).
The laws governing the ECB are extremely clear, and repeat three features which policy must comply with:
1. T...
There is a lot more the ECB can do
So far, the debate on negative interest rates completely misses the point. If the private sector could borrow at long maturities at negative interest rates, banks could be profitable, and savers didn't experien...
The economics of language: David Hume & valuing Facebook
David Hume is the first great thinker to identify language, law and money as 'spontaneous' institutions of social organisation. Hume was on to something quite profound, which remains under-appreciated.
Langu...
Debt-free money: A brief reply to Randall Wray
L. Randall Wray is exercised by my suggestion that he has engaged in semantic sleight-of-hand. To summarise my argument: it is an obvious fact that a ten dollar bill is not a debt - because the issuer owes the...
Accounting as religion: Buffett, Derrida, and MMT
A number of my recent posts seem to have wound up some of the more sensitive ‘mainstream’ economists, who don't like the suggestion that the likes of Minsky deserve their own 'school’. Some philosophers of sc...
More on eclecticism
“Experience has shown that Mother Nature is eclectic”
- Paul Samuelson
This recent blog on the merits of eclecticism in macroeconomics seems to have resonated. It follows a theme Dani Rodrik has advocate...
Paul Krugman is right – our models may be better than Larry’s instincts
The debate between Larry Summers, Brad DeLong and Paul Krugman over models and confidence is summarised excellently by Martin Sandbu. On one point, Krugman is absolutely right: there was never any reason to be ...
The case for eclecticism
Most macroeconomists have a mental model of how the economy works. I think there are five relevant mental frameworks:
Keynesian. This is the approach that most people are taught in high school and un...