Secular stability
The defining characteristic of US economic data since the financial crisis is not stagnation, but stability. We all look back on the Great Moderation with incredulity at the hubris of economists. But has realit...
When big data is worse than a sample of none
Michael Mauboussin uses a very simple exercise to illustrate how difficult it is to statistically distinguish skill from luck. Investors are often deemed geniuses or fools based on small samples. Think of those...
The economics of partying too hard
What is the difference between work and leisure? A distinction based on paid and unpaid activities is incomplete. A better distinction is between activities we want do and those we don’t enjoy. But this is also...
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...