Category Nick Rowe
Helicopter Bonds as Qualitative Easing
Accounting can be fun. Helicopter Bonds is when the government prints some bonds and drops them out of a helicopter, so whoever picks up the bonds now owns them. It's identical to a bond-financed lump-sum transfer payment. It's identical to a bond-financed lump-sum tax cut (because only net taxes=taxes-transfers matter). The government borrows money from […]
Helicopter Money is Permanent
The shocks in a random walk process are permanent. That does not mean it is impossible for a positive shock to be followed by a negative shock. It does mean it is equally likely that a positive shock will be followed by a positive shock as by a negative shock. That's what I mean by […]
The Neo-Fisherian Counterfeiter
Just a thought-experiment that's been running through my head. You are a saver and lender. You take some of the money you have earned as income, that you don't want to spend yourself, and lend it to people who want to borrow so they can spend it instead of you. Suppose you want to lend […]
Conceptually costing Basic Income
Micro public finance is not my area, so take this post with a big heap of salt. But: Q. How much would it cost to implement a Basic Income, where everyone gets (say) $10,000 per year? The normal way to approach that question is to multiply $10,000 by the population, then subtract the cost of […]
Chartalism and stock-flow consistency
[A post for Alex Douglas.] Here are two closely related questions, about Chartalism and the relation between stocks and flows of money. 1. How can intrinsically worthless bits of paper be a valuable asset that gets used as a medium of exchange? One answer is that the government forces us to pay taxes with those […]
Stag Hunt and The Money Problem
If I were any good at writing book reviews, this post would tell you all about Morgan Ricks' new book "The Money Problem", and would explain why I think it's a very good book. [Disclaimer: I was paid to fly down to Nashville for a couple of days to help Morgan with his first draft.] […]
It’s easier to have a sensible fiscal rule with an NGDP level-path target
It's a simple point, perhaps an obvious point, that only needs a short blog post, but I think it's worth making. The Brits seem to be arguing about whether they should have some sort of rule (or charter) for fiscal policy, and if so, what it should look like. I am a bit skeptical, because […]
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. […]
Does saving count towards GDP?
Here's a fun one. (OK, I think it's fun, anyway.) Especially for those who teach macro. A first year student emails me. Paraphrasing, he asks "For a closed economy, we know that national saving equals national investment, and investing in newly-produced goods counts towards GDP. And "saving" means anything we do with our income other […]
ISLM pictures with interest on money
By popular request (well, David Andolfatto asked, but I think he's right to ask) I'm drawing a picture to illustrate my previous post on the distinction between the interest rate Rb you get paid for lending money and the interest rate Rm you get paid for holding money. But first I need to take a […]
Worthwhile Canadian Initiative 
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