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....
Paul Krugman is right – our models may be better than Larry’s instincts
The debate between Larry Summers, Brad DeLong and Paul Krugman over models and confidence is summarised excellently by Martin Sandbu. On one point, Krugman is absolutely right: there was never any reason to be ...
The fair division of a windfall
An interesting debate is occurring over the ethics of granting the central bank power to make cash transfers to households. This is not an academic debate. I think one of the main stumbling blocks to this polic...