Category Nick Rowe
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 […]
Why has the Bank of Canada “done nothing” for 4 years?
On the face of it, the Bank of Canada has done absolutely nothing for nearly 4 years now, and most people think it won't do anything until sometime next year. The target of the overnight rate has stayed at 1% for a very long time. This is very puzzling. I do not understand it. But […]
Why do I hate driverless cars?
I hate driverless cars. That is the fact that needs to be explained. Not justified, but explained. Driverless cars pose no threat to my job, my income, or my wealth. That's not it. The insurance companies, or safety-nazis, might force us to use driverless cars. That would be a threat to my enjoyment of driving. […]
If new money is always paid as interest on old money
…will an increase in the rate of interest paid for holding money be deflationary (because it increases the demand for money), or inflationary (because it increases the growth rate in the supply of money)? This question crops up from time to time, in comments here and on other blogs, so I thought I would lay […]
The Quantity Theory and Neutrality of Money when money is endogenous
"If the central bank permanently doubles the stock of (base) money: all nominal variables will double [that's the Quantity Theory of Money]; all real variables will stay the same [that's the Neutrality of Money]." The Quantity Theory of Money and the Neutrality of Money go together. It is very hard to have one without the […]
When is helicopter money optimal?
Money is fungible. And things get lost in translation, especially between micro and macro. "Helicopter money" is when the central bank prints money, gives it to the government, and the government gives it to everyone, as a freebie. When is helicopter money optimal?
On not quite getting Lloyd Metzler
30 years ago, IIRC, my colleague Steve Ferris said I should read Lloyd Metzler's Wealth, Saving, and the Rate of Interest, because he thought it was a great paper. Yesterday Brad DeLong said the same thing. David Glasner also thinks it's a classic paper. When three very good but very different economists recommend a paper […]
The continuum from monetary to fiscal
Simon Wren-Lewis says (in response to right-deviationist David Beckworth): "Now this does not mean that Market Monetarists and New Keynesians suddenly agree about everything. A key difference is that for David this [fiscal policy at the ZLB] is an insurance against incompetence by the central bank, whereas Keynesians are as likely to view hitting the […]
Three growth stages of the New Keynesian model
This is very very crude. It's something off the top of my head scribbled on a scrap of paper as an outline for a first draft. But I will never go beyond that outline, because I wouldn't be any good at doing it. The history of the Old Keynesian model is very quick. You have […]
New Keynesian neo-fiscalists for increasing austerity
I was off at the cottage when Simon Wren-Lewis and Paul Krugman responded to my post on neo-fiscalism. Amusingly, given Simon's metaphor, the handbrake on the MX6 seized on as I was driving, slowing me down and creating a nasty smell. I did a fiscal bodge-job with a screwdriver to free it, and did a […]
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