Central bank ‘equity’ debunked
The equity of a corporation is the difference between its assets and liabilities. Under typical accounting practice for central banks, transferring cash directly to households would result in a decline in their...
Defining Emerging Markets
Emerging markets are not poor countries, nor are they countries which are making economic progress. They are defined by a very specific set of macroeconomic properties, which financial markets are conscious of,...
r* and the range of irrelevance
Despite the fact that interest rates determine all asset valuations, there is nothing close to a general theory of interest rate determination. The rule of thumb when I started working in financial markets was ...
MMT part III – conclusion, and a conversation with Ben Bernanke
My last two blogs have revisited the issue of whether or not base money is a liability of the state. The issue played a central role in a discussion over the future of monetary policy at the Brussels think-tank...
MMT part II: a synthesis, an olive branch, and a defence of Twitter
This is a short follow-up to my previous post, ‘MMT - sophistry or substance?’, and Simon Wren-Lewis’s ‘Why is MMT so popular?'.
Summarising, I suggest the two defining characteristics of MMT are: (1) a theo...
MMT: school of thought or set of personalities?
MMT revisited
Simon Wren-Lewis’s recent post on why MMT is so popular makes a number of important points. The Twitter response to Simon’s post was fairly representative - to its credit, MMT has a committed c...
Raising rates is a stimulus
There are two broad categories of monetary policy instrument: 1) measures which are aimed at influencing market interest rates, and 2) transfers from the central bank to the private sector.
‘Conventional’ m...
Intelligent money & valuing Bitcoin
The most significant innovation in Bitcoin is not blockchain, nor the fact that it is a non-state-backed electronic currency. It is truly ground-breaking because it is the first 'intelligent' money. An 'intelli...
The case for a new economics
What’s really wrong with NAIRU
Earlier this year, Matthew Klein at FT’s Alphaville, made a typically punchy and well-argued case for abandoning a cornerstone of the current macro policy framework - the NAIRU...
Has the Bank of Japan solved the ‘Piketty problem’?
Japan’s unlikely re-distribution
Why is the Bank of Japan (BoJ) trying to raise the rate of inflation? Taking account of its demographic profile, Japan's economic performance has been impressive by developed w...