Monthly Archives: February 2014
Negative money
There are two parallel worlds. Both worlds use bits of coloured paper as money, because barter is very difficult. The green world uses green paper as money, and the red world uses red paper as money. The green paper money has a positive value. The red paper money has a negative value.
Two interest rates, and one simple question.
Most simple macro models have just one (nominal) interest rate. I want to complicate it, just a little, by talking about two (nominal) interest rates: 1. There is the rate of interest you get paid if you hold money. Call it Rm. 2. There is the rate of interest you get paid if you lend […]
Separating real from nominal shocks
Nobody wants a monetary policy that creates nominal shocks. "Don't do random stuff with monetary policy for no reason at all!" is clearly sensible and uncontroversial advice. But finding a monetary policy that separates real shocks from nominal shocks, so that real shocks don't also create nominal shocks, is harder. But that is exactly the […]
Worthwhile Canadian Initiative 
Recent Comments