No expectations
Nick Rowe and his colleagues in Canada have a superb blog. If you’re interested in economics and don't already follow it - take a look.
Recently, Nick and I have been discussing the relevance of ‘permanence...
Is it permanent? A reply to Nick Rowe
Nick Rowe has written a typically-lucid note which makes clear why it might make a difference to consumer behaviour if a tax cut is permanent, or temporary. To this extent, we are in full agreement: giving some...
The distinction between monetary and fiscal policy
Policies which have fiscal effects are not necessarily fiscal policy. To believe otherwise is a fallacy.
The distinction between fiscal and monetary policy is rarely, if ever, made clear by economists of an...
Buffett v the Landesbank – the US gets paid to have a trade deficit
It remains conventional wisdom that the US current account deficit is the accumulation of a debt that will one day need to be repaid. There are very good reasons to believe this is false. The US in fact has ne...
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...