Monthly Archives: December 2012
The Duke of Wellington on the best way to start a Japanese debt crisis
I happened to read Michael Schuman's article in Time. The title is "Will Japan's Next Prime Minister Start a Debt Crisis?" . My immediate reaction: I hope so. Because the only thing that can save Japan is a debt crisis. It's a pity Japan didn't have a debt crisis 20 years ago, but better late […]
Chalk Up Another for the Economics of Google Searches
The Google search engine continues to demonstrate its use as a tool for predicting human behaviour and activity based on the frequency of topics searched by its users. Google data has been used to track flu activity and even fertility behaviour. A Banca D’Italia November 2012 working paper by Francesco D’Amuri and Juri Marcucci is […]
In praise of General Equilibrium Models
Q1. What happens if they built robots that could do my job as well as I could, and those robots got cheaper and cheaper over time? My wages would have to fall so I could compete with the robots, and I would be worse off. Q2. What happens if they built robots that could do […]
Who is the caregiver?
In the picture on the right, who is the caregiver, the man or the woman? (To find out the answer, click "Continue reading…").
Production of Robots by means of Robots.
(Sorry about the title. The devil made me write it.) What are we afraid of? Let's think about the worst-case, nightmare scenario for the distribution of income. Assume that all capital is robots, and robots are perfect substitutes for human workers. One robot can produce everything and anything one human worker can produce. And that […]
Canadian Exceptionalism in Compensation
The Parliamentary Budget Office's most recent release "The Fiscal Impact of Federal Personnel Expenses: Trends and Developments" provides some interesting statistics on the amounts of employee compensation paid by Canada’s federal government. According to the report: “in 2011-12, Canada’s federal personnel expenses were $43.8 B, or 2.55 per cent of GDP. These expenses supported a […]
Mark Carney and NGDPLPT
Mark Carney said: "If yet further stimulus were required, the policy framework itself would likely have to be changed.19 For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP […]
Triangles, rectangles, trapezoids, stripes, and gaps.
I liked Steve Williamson's post on gaps and triangles. But I think about it a bit differently.
Defending Hayek against the Austrians
[I wrote this post several days ago, as an afterthought in what JP Koning calls "The great monetary injection debate of 2012". Then I sat on it. Not just because it's a bit ad hominem/gotcha!. I'm not sure it's quite right. Anyway, with that caveat, I'm just throwing it out there, to see what readers […]
Capital-biased technical change vs low interest rates?
Paul Krugman says that recent technical change has been capital-biased. That robot story sounds plausible to me too. But if so, why are real interest rates so low? (Yes I know there's a global recession on, but real interest rates were falling even before the recession). Maybe we are forgetting a third factor, land, and […]
Worthwhile Canadian Initiative 
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