Category Macro
Suppose that printing money were irreversible
Suppose, just suppose, that you believed that printing money was irreversible, or just very hard to reverse. So central banks could increase the supply of base money by printing money, but could not (or could not easily) reduce the supply of base money again by burning money. And suppose you knew that central banks had […]
Three meanings of “printing money causes inflation”
This is supposed to be a very simple post, mainly for non-economists. "Printing money causes inflation" can mean three different things. What I will say here should be obvious to economists, but I'm not sure if it is obvious to non-economists. And it makes me wonder if sometimes things get lost in translation. Maybe, just […]
How to destroy the “neoliberal consensus”
C'mon guys. If you are going to put forward a lefty conspiracy theory to explain why monetary policy is tighter than you (and I) think it should be, you at least need to get your story straight.
Why are lawyers against higher inflation?
An extremely quick Google search convinces me that lawyers are massively over-represented in the Canadian Parliament. I am quite sure that something similar is true in other countries too. Lawyers are far more powerful in setting government policy than are ordinary middle-class people like me. So if we want to understand why monetary policy is […]
It’s the Inflation Fallacy, duh!
Paul Krugman is wasting his time trying to figure out why the rich and powerful don't like inflation. There's a simple answer, that also explains why the non-rich and non-powerful don't like inflation either. And you don't need any fancy political economy to figure out the answer. If you want to know why non-economists don't […]
A simple question about Walras Law
Inspired by Free Radical's post, I think I have figured out a simpler and clearer way to say what I want to say about Walras' Law. Ask yourself the following question: Q. Assume an economy where there are (say) 7 markets. Suppose 6 of those markets are in equilibrium (with quantity demanded equal to quantity […]
The ECB cannot move last
I think this diagram helps us understand the Eurozone problem in simple game-theoretic terms:
Second best monetary and fiscal policy and the strategy space
[This post covers too much ground and stretches my brain too far. I'm trying to put Lipsey-Lancaster and game theory together, and apply it to monetary-fiscal. I blame Brad DeLong for making me think about this.] Brad DeLong says: "But as long as Nick Rowe recognizes that fixing situations of depressed activity by simply printing […]
Land vs Helicopters
[This post is not as clear as I want it to be. Sorry.] Most discussions of long run secular stagnation, and short run liquidity traps, ignore land. They shouldn't. If a central bank runs out of other options to increase aggregate demand, it could always use helicopter money. Or it could buy land. Is it […]
Money, prices, and coordination failures
[This is very long, and covers a lot of old ground for me, as well as some new. It was supposed to be a belated reply to Brad DeLong's post. But my thoughts wandered. (By the way, for some reason I never remember being annoyed at Simon Wren-Lewis, even when I disagree with him; but […]
Worthwhile Canadian Initiative 
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