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...
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...
More on Bitcoin (Part I)
Bitcoin proves that the 'interest' paid by central banks on bank reserves (IOR) is not an "interest rate" but a helicopter drop to banks. Imagine that Bitcoin came with an additional feature, that all holders o...
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...
Blogoff – The Curse of Cash
Rogoff's law - the opposite is usually true
Punning on Kenneth Rogoff's surname is proving irresistible. He has just launched a new economics blog, which should prove rich in thought-provoking missives. Conf...
Where next? Monetary policy in a post policy-rate world
Three new bazookas
Recent shifts in policy direction by global central banks may prove to be profound. The Bank of Japan and the ECB appear to be conceding that further bond purchases and lower policy rates ar...
Fiscal subservience – a reply to Chris Sims
Chris Sims is a deeply thoughtful economist and his paper at the recent Jackson Hole conference has rightly received a lot of attention, notably from Gavyn Davies, in the FT, and Paul Krugman.
It is simultan...
Institutions matter
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...