Monthly Archives: December 2015
Don’t blame lack of cool new stuff for the slow recovery
I look in my garage and admire the lovely lines of my MX6. But it's a 21 year old car that I'm using for my daily driver, and I really should get a new car. But what sort of new car? Sometimes I look at the new MX5 and the Toyobaru twins, but……..no. Both are […]
Gross output and monetary disequilibrium
I learned a new macro fact yesterday, from Vincent Geloso. Macroeconomists should always be on the lookout for new facts that might help us discriminate between macro theories (since they won't let us do randomised experiments with hundreds of countries). Here's a (clearer) graph that Vincent tweeted this morning: It's US data. The red line […]
Tight money as binding output quota, and upward-sloping IS curves
Like all metaphors (and like all models), it works up to a point. Let's see how far it takes us. David Andolfatto has a lovely neat little model that he uses to engage my point that the IS curve may slope up — so tight monetary policy may cause the real interest rate to fall […]
Minimalism and recessions
There's a fine line between minimalism and unfurnished. I'm trying to find where that line is. [This is a heavily revised version of an old post.] Simplicity and minimalism tend to go together, but they are not the same thing. A simple model is one that is easy to understand. Which is a good enough […]
Upward-sloping IS curves: simple version
My last post was not a success, judging by the (lack of) reader response (brave and smart John Handley aside). Too complicated. Let me make it simpler, and shorter. 1. Suppose, by magic, the capital stock increases by 10%. New machines just fall from the sky, like manna from heaven. And suppose the central bank […]
Upward-sloping IS curves after Miles Kimball
I hadn't realised until last week that Miles Kimball is way ahead of me on upward-sloping IS curves. (Miles doesn't want to call it an "IS" curve if it slopes up, but that's a pedagogical point.) I also hadn't realised how close Miles is to being One of Us (he calls himself a "new monetarist […]
Monetary business cycles and counter-cyclical human capital investment
I happened to be chatting with an Earth Science prof this morning. He mentioned that enrolment in Earth Science graduate degrees was strongly counter-cyclical (with a short lag). When the job market weakened, more students decided to get a graduate degree. When the job market strengthened, applications for graduate programs dropped. There seems to be […]
Money demand and supply in a red/green world
Because it's Sunday. "Green" money has positive value; "red" money has negative value. (An overdraft in your chequing account is red money.) We live in a red/green world with both types of money, so we ought to start thinking about money supply and demand in a red/green world. The red/green world is the real world. […]
Switzerland as a closed-end mutual fund with a country attached
You can't say much beyond a snappy title in 140 characters, so I thought I should write a short post explaining what I meant. You can, if you want, think of (central bank) money as shares in a closed-end mutual fund. The mutual fund has assets, that are mostly financial assets. The returns from those […]
What is a “cashless” economy anyway?
I was reading Josh Hendrickson's (good but difficult) paper about Jurg Niehans on the cashless economy (which predated Michael Woodford by a couple of decades). But I can't get this question out of my head. Tell me exactly where it is on my slippery slope that this economy becomes "cashless", and tell me why it […]
Worthwhile Canadian Initiative 
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