Monthly Archives: December 2019
Increased Price Flexibility is Destabilising in New Keynesian Models. (And a Price-Level Path Target is Stabilising)
Start with a very simple New Keynesian "IS" (or "Aggregate Demand") equation: y(t) = E[y(t+1)] – a[r(t)-r*(t)] The "real" (inflation-adjusted) interest rate r(t) is defined as the "one period" nominal interest rate, minus expected inflation for the following "one period". In order to stabilise output y(t), relative to expected future output E[y(t+1)], the central bank […]
Does (cohort) size matter?
In the US, the portion of young men between the ages of 18 to 34 who report having at least one partner has fallen substantially in recent years (sorry for the small image size): Charts similar to the one above have prompted talk of a sex recession. Yet worries that Millennials are killing sex (as […]
Worthwhile Canadian Initiative 
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