Category Nick Rowe
Money stocks and flows
Because "stock-flow consistency" makes me think of money. [Here's Simon Wren-Lewis' and Jo Michell's good posts, but I've got a one-track mind.] 1. If you want to increase the stock of land in your portfolio, there's only one way to do it. You must increase the flow of land into your portfolio, by buying more […]
University budget surpluses: irreversible investment and uncertain demand
Unless it has a massive endowment fund, a university's biggest asset is its reputation. If it loses its reputation and students stop coming and paying, a university has only got a bunch of buildings that often aren't well-suited for any alternative use. That asset is not on the books. Unless it has a massive debt, […]
Raising the Inflation target vs Depreciating Paper money against Silicon money
A New Keynesian central bank considers two alternative policies to mitigate the risk of hitting the Zero Lower Bound: Raise the inflation target from 2% to 3%. Announce a crawling peg exchange rate between the paper money it issues (currency) and the silicon money it issues (reserves), so that paper depreciates at 1% per year […]
Alpha Banks, Beta Banks, and negative rates
This post is not as clear as it should be. Sorry. It's because my head is not very clear either. I wrote this to try to get my head clearer. An imaginary country uses 7 different media of exchange, issued by 6 different banks. There is one alpha bank, and 5 beta banks. The alpha […]
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 […]
Finite Horizon models of inflation as the horizon goes to infinity
You have an infinite horizon model of inflation. Your model tells you what happens to the time-path of the price level P(t) if the central bank changes monetary policy. Please do something: Convert your infinite horizon model into a finite horizon model. Suppose the price level at time T, when the world ends, is pinned […]
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 […]
Central Bank Coordination as BS; Targets vs Instruments.
Imagine you are at an international policy conference. Someone says "Central Banks need to coordinate their monetary policies better". You nod your head wisely in agreement, along with everyone else. Because you know that what one central bank does affects not just its own economy but the economies of other central banks, so there are […]
Wage Norm Function vs Stock Price Belief Function
Roger Farmer always has done interesting and different stuff. We need economists like that. But it's risky of course. What I'm trying to do here is articulate something that makes me uneasy about his recent line of macro theorising. Like his simple model here with Konstantin Platanov (pdf). Consider a simple model with three goods: […]
The Irrelevance of Universal Basic Income
The Modigliani Miller Theorem says that a firm's financing policy is irrelevant. It's wrong of course, but it's a good place to start thinking about firms' financing policies. It would be presumptuous to talk about an Irrelevance "Theorem" for Basic Income. The math is trivial, and the economics is obvious. (And I hope this is […]
Worthwhile Canadian Initiative 
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