Category Nick Rowe
Some very basic non-Walrasian economics
If we had one central market, with a Walrasian auctioneer, where all goods are traded simultaneously for each other, none of this would matter. But we don't; so it does. Partial equilibrium theorists don't need to know this stuff. People who believe prices are always at market-clearing levels don't need to know this stuff. Everyone […]
My macro framework
FWIW. Since everyone else seems to be doing this. 1. There are n different types on labour. 2. Each individual has an endowment of one type of labour, and wants to trade some of it for some of the other types of labour. 3. But (double) coincidence of wants is rare, so they use money […]
Vortigern’s immigration policy
Economists aren't exactly noted for their expertise in Cultural Studies (I think that's what I'm doing here), but I'm going to give it a go. The fact that the Arthurian legend still resonates 1,500 years later tells us something about people, their hopes and fears. According to legend, Arthur was the British resistance leader who […]
Robots and the Core
I don't do micro. Can somebody please find me some simple accessible link that explains "the core" and its relation to competitive equilibrium? Thanks. This one (pdf) looks good but has got too much math for me to understand. [Update: here's Aumann (pdf). First couple of pages are readable. Thanks notsneaky.] Suppose you have an […]
A modest proposal for renewed imperialism
I hear that a lot of people want to migrate to…Finland. I'm pretty sure it's not because they like Finland's climate, or scenery. I don't think it's got anything to do with the physical geography of Finland. I think that they want to move to Finland because they like Finland's political, legal, and social institutions, […]
“Drop your shovels NOW!” On ending fiscal policy in NK models
I've been trying to get my head around this over the last few days. Still not sure I'm there yet. But anyway: It seems to me that the effect of fiscal policy at the Zero Lower Bound in New Keynesian models is extremely sensitive to timing the exit. This isn't about finding "shovel ready" projects […]
Business cycle theory vs growth theory
Macroeconomics is divided into (short run) business cycle theory and (long run) growth theory. Those of us who do business cycle theory have a bit of an inferiority complex (though you might not know it from listening to us argue). Because growth theory seems to be so much more important. Where would you rather live: […]
Secular stagnation and Mutual Fund Marxism
Suppose the government issued a financial asset that, adjusted for risk and liquidity, promised a higher rate of return than any alternative asset. The government can do this, because it has the power to tax. Everybody prefers holding that government-issued financial asset to any other asset. There would be an excess demand for that government-issued […]
Old Keynesian vs New Keynesian fiscal policy
Mostly for non-macroeconomists. I first learned macroeconomics in the very early 1970's in the UK. I learned that the macroeconomy was not automatically self-equilibrating, and that the government should use fiscal policy to target "full employment" (aka "potential output"). The government should loosen fiscal policy when the economy was below potential and tighten fiscal policy […]
One awkward question about Stephen Poloz’s speech (on Integrating Financial Stability into Monetary Policy)
Suppose the Bank of Canada were following a 5% NGDP level-path target. And suppose that actual NGDP was on target, and was expected to remain on target in future. And suppose you were Governor, and one of your advisors gives you some important news. Financial markets are in a bubble, so the prices of financial […]
Worthwhile Canadian Initiative 
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