Category Macro
Why Dalton McGuinty Desperately Needs a U.S. Economic Recovery
Recent reports suggest that the federal government may be seeing some improvements on the deficit front due to increases in revenue. However, no such luck seems to be gracing Ontario. Indeed, the Drummond’s report forecast of continued lackluster revenue growth for Ontario due to its weak economy has placed Ontario’s government in a bind.
Do illiquidity and sticky prices go together? If so, why?
Some goods are easy to buy and sell quickly. They are liquid. Other goods are harder to buy and sell quickly. They are illiquid. Some goods' prices adjust quickly to changes in demand and supply. They have flexible prices. Other goods' prices adjust slowly to changes in demand and supply. They have sticky prices. 1. […]
Sticky prices vs sticky coordination; inflation vs NGDP targeting
Monetary policy matters (mainly) because of nominal rigidities. The simplest story of nominal rigidities is that (some) prices (or wages) are sticky. Firms want to change prices when a shock hits, but there is some cost that makes it hard for them to do so. The object of monetary policy should then be to target […]
Iceland and the Loonie?
Some people in Iceland want to abandon the Krona and adopt the Loonie. This came as rather a surprise to me. Here are some thoughts off the top of my head:
Money as store of wealth?
This is something that always bugs me with the textbooks' definition of money. They start out well. They provide a functional definition of money; "money is what money does". If people in a given time and place use cigarettes as money, then cigarettes are money, in that time and place. Moneyness is not a property […]
Three questions on the transmission of business cycles
I've been mulling this over for the last couple of weeks. I haven't really come up with a clear answer. So I thought I would just throw it out there. I've got three questions. The most important question is the third question. 1. Assume I am an individual household or small firm, and that I […]
The mute king
Once upon a time there was a king. He was king because his father had been king before him, and his father before that. It was just kings, all the way back. The king gave orders, which people obeyed, because he was king. The king gave good orders, and because the people obeyed those orders, […]
Fiscal Policy, and the macroeconomics of doing nothing, redux
I don't think Simon Wren-Lewis will find this an annoying argument against fiscal policy. I hope not anyway. Let's assume that New Keynesian macroeconomics is 100% correct. What role is there for fiscal policy?
The politics of NGDPLP targeting, redux
Back in November 2011, there was a part of the world that I didn't understand. The politics of monetary policy didn't make sense to me. Now the world is starting to make more sense. It's not that my understanding has changed. It's the world that has begun to change. Specifically, John Quiggin has come out […]
Robert Waldmann (and others) on Dean Baker (and hence Paul Krugman) and the burden of the debt on future generations
Robert Waldmann here. Bob Murphy here. Richard Williamson here. I've done my bit, and have failed. Robert Waldmann may succeed. If Robert Waldmann fails too, that would be very bad for the credibility of economics blogging.
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