Category fun
What’s in a Name?
We all know that the word “economics” comes from the Greek “oikonomia” which refers to the thrifty management of household affairs. By extension, the origin of the term “economy” is closely related to the same term as it is from the Latin “oeconomia”, which is again from the same Greek “oikonomia”. From all this, it […]
The Economist on WCI
The Economist has a story on the state of the Canadian economy and it features an appearance by Livio Di Matteo: Yet luck played a large, unacknowledged part, says Livio Di Matteo, an academic and contributor to Worthwhile Canadian Initiative, the world’s best-named economics blog. It's official: WCI is now the best-named economic blog. Take […]
Within versus Between Sample Variation, or Why an Equal Marriage Means More Sex
It's clickbait, New York Times style: "Does a More Equal Marriage Mean Less Sex?" Spurred by findings of a paper by Sabrino Kornrich, Julie Brines and Katarina Leupp published in the American Sociological Review, the article argues that, "too much similarity in egalitarian marriages leads to boredom and decreased sexual frequency". In general, "the less gender differentiation, the […]
The anti-NK model and minimum wages
I present a simple model that has exactly the opposite predictions to the standard New Keynesian model: if the central bank sets the nominal interest rate too high (too low), that will cause an increase (a decrease) in output and employment. If you think that an increase in the minimum wage will cause increased employment, […]
A simple New Keynesian brain-teaser
Update: I sketch my own answer in the comments below. This is a question for all students of New Keynesian macroeconomics. I mean "students" in the sense of "those who study", so that includes the profs too. It is a very basic question. There is no fancy math to fool you. If you cannot answer […]
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.
Does the invention of nifty new goods increase AD?
I'm going to offer a partial defence of Michael Mandel against Scott Sumner. (Read Scott to see what Michael said and might have meant, but it doesn't really matter what he really meant, because it's an interesting question anyway). The question is this: would the invention of a lot of nifty new goods that people […]
Satisfaction
It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, is of a different opinion, it is because they only know their own side of the question. The other party to the comparison knows both sides. […]
The inflationistas are our friends; and inside and outside inflationistas
Noah Smith is doing something very wrong. The whole point of monetary policy at the ZLB is to create inflationistas. We need more inflationistas, not less, and so Noah should stop dumping on them, and saying their fears of inflation are groundless. For every inflationista destroyed by us laughing at their fears, central banks have […]
Money and the greater fool
[Update: this post wasn't as clear as I wanted it to be. Because my head wasn't as clear as I wanted it to be. Reading and responding to comments has helped me get clearer, I think. Let me try this: There are two reasons why people buy an asset: 1. Because owning the asset earns […]
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