Category fun
The Devil You Know vs The Market For Lemons
I told my friend Mike I was thinking of trading my car in for one that used less gas. Nowadays I would talk about the Market for Lemons as a reason against doing what I was thinking of doing. But in 1974 I didn't know about Akerlof's famous paper, and neither did Mike, who was […]
Monetary Policy for a central bank with no balance sheet
How a central bank can do things with words. Imagine a central bank with no assets and no liabilities. It does not issue money. It does not buy or sell anything. It does not regulate the commercial banks. The only thing it controls is one word in the dictionary. Every morning it edits the dictionary, […]
Financial Assets > Liabilities
Take Bitcoin for example. It's a financial asset to whoever holds it. To whom is it a financial liability? I suppose you could say "it is a liability to the whole community of those who accept Bitcoin in exchange for goods". But that answer seems like a desperate attempt to salvage the assets=liabilities dogma. Nobody […]
Monetary Science Fiction
Chris Dillow says that economics is like literature. Maybe it is, and maybe it isn't. But if it is literature, economics needs more science fiction. Paradoxically, imagining radically different worlds can help us understand better how the actual world works, as well as helping us consider policy alternatives. Imagine a world where all borrowing and […]
Do (local) housing demand curves slope up?
Take this post with a truckload of salt. This is a second in my series in which "Lost Macro Farmboy tries to get his head around Urban Economics". Think of it as sceptical pushback. I might easily be wrong, but those who know a lot more Urban Economics than I do should be able to […]
Some Simple Basic Money, for Finance People
Finance people are good people. Economics needs finance people. Some of my best friends are finance people. But (you heard that "but" coming), finance people (though there are of course honourable exceptions) just don't seem to get money. I can hear the reply now: "Yeah, and money people don't get finance either!". And I think […]
New Keynesian macro when all output is consumer durables [DRAFT]
Warning: math-challenged economist at play. I want to see if I can sucker any readers into checking my math and doing the rest of the math for me. Do not read this post unless you think that might be fun. Update: Keshav has solved the math. Now we are trying to understand what it means. […]
Anti Urban Economics
I'm just throwing this out there. Read at your own risk. I don't know what I'm talking about (even more than usual). I'm just thinking out loud, and being ornery. I will explain where I'm coming from after I've made my point. There's a difference between "strategic complementarity" and "positive externalities". Strategic complementarity is what […]
Negative interest vacuum-cleaner Gesellian money for broke central banks
[I can't decide whether this thought-experiment has any policy relevance. I hope not, but who knows what the future will bring? It came to my mind after reading a (more policy-relevant) post by Simon Wren-Lewis.] 1. Helicopter money is when the central bank prints money and puts it in people's pockets. Vacuum-cleaner money is the […]
The equivalence between national debt and transferable monopoly rights
I got this idea from reading a Matt Rognlie comment on a previous post. (But Matt may or may not agree with what I say here). A. Suppose the government sells bonds, and finances those bonds by imposing a 10% sales tax on (say) milk. B. Suppose the government sells transferable milk quotas, and sells […]
Worthwhile Canadian Initiative 
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