Where next? A reply to Andy Haldane
Andy Haldane is one of the world’s more thoughtful central bankers. The concerns he lays out in his most recent speech warrant attention - particularly the deflationary winds blowing from Asia, as discussed by ...
The fair division of a windfall
An interesting debate is occurring over the ethics of granting the central bank power to make cash transfers to households. This is not an academic debate. I think one of the main stumbling blocks to this polic...
Myopia, ‘mathiness’, China, & Corbyn
A lot of intriguing debates have occurred in the last month or so that merit individual blogs, but markets have been preoccupying me, so I have been unable to write at length. In some ways, these four subjects ...
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...