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...
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...
The Bank of Japan is testing Romer’s hypothesis
Has the last thirty years of macroeconomics been a waste of time?
World Bank chief economist, Paul Romer, has again written a very important critique of modern macroeconomics – or more specifically the academi...
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...
There is no r*
Like many economists, I have been trapped into thinking that there is an equilibrium real rate of interest - a level of the policy rate consistent with stable inflation, a closed output gap, or full employment....
There is no shortage of safe assets – a short proof
Safe assets are bunds, treasuries, gilts, JGBs and other government bonds issued by large developed economies. In one sense, they actually are ‘safe’ assets. They are typically negatively correlated with risk a...
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...
Eight pitfalls to avoid in the helicopter money debate
Learn first, then teach
Professors Stephen Cecchetti and Kermit Schoenholtz are the latest to opine on the subject of helicopter money. It is worth quoting from their opening paragraphs, it frees me up to re...
Monetary policy: transparency or obfuscation?
We live in a era where monetary policy is more transparent than ever - if measured by press conferences, publication of minutes and individual policy-makers forecasts.
At the same time, the behaviour of cent...