Category Nick Rowe
Meritocracy, mobility, and optimal taxation
What would a perfect meritocracy look like? Suppose we could all agree on a definition of "merit" as "ability to contribute to the common good". Suppose that each individual was born with a certain quantity of "merit", and that we could observe and measure each individual's "merit" perfectly. It's indelibly stamped on their foreheads. Suppose […]
Secular stagnation and the end of retirement?
Retirement is weird, when you think about it. We consume small amounts of leisure for most of our lives, then suddenly stop working completely and consume a big bunch of leisure for the rest of our lives. We smooth our consumption of all other goods, but we don't smooth our consumption of leisure. Instead we […]
Monetary monarchy
Speculative musings, from an inadequate historical background. We tend to take it for granted that the world looks like this, from a monetary perspective: The world is divided into currency areas. Each currency area has one alpha bank (the king). All the other banks are beta banks (subjects, who follow the king). The beta banks […]
On forgetting land in models of secular stagnation
If I see one more model of secular stagnation and negative equilibrium real interest rates, that does not include land….I'm going to throw a real wobbly. What is it with you townies? Have you never looked out of the window, when you fly (do you ever drive?) from one city to another, and wondered about […]
Shadow banking as required reserve tax avoidance?
This is speculative. I don't know whether it works empirically. Or, I should say, I don't know how much it works empirically. The effect I am talking about here might be large, and explain almost everything. Or it might be small, and explain almost nothing. I'm just throwing it out there. Legally required reserves, if […]
Deflationary banks
It's good to think about weird worlds, which you know are different from the real world. It helps you understand the real world better. Here is a weird world where commercial banks' wanting to expand loans and deposits would reduce aggregate demand and cause deflation. But the only weird assumption is that currency and deposits […]
Temporary vs permanent money multipliers
"Otherwise what I was mostly trying to suggest was that the banks anticipate the fact that the central bank won't let them double the supply of money and factor this into their loan and deposit pricing. The idea is that the current amount of deposits is not so much based on the curren[t] supply of […]
What is a “managed exchange rate”?
It's a relative thing. I think it can only be defined relative to some specified alternative, like inflation targeting. It doesn't mean anything otherwise. There are n different things a central bank could target, where n is an extremely large number. (Strictly, n is infinite, since any combination of two members of n is also […]
Two first year multipliers: their truth, beauty, and usefulness
Alone again or, just me and the money multiplier, against the world of trendy sophisticates who have put aside such childish things. It brings out the reactionary contrarian in me. And the world needs more reactionary contrarians, to help provide negative feedback against the faddish bubble multiplier of popular theory. There are two multipliers we […]
There can be an excess supply of commercial bank money
Commercial banks are typically beta banks, and central banks are typically alpha banks. Beta banks promise to convert their money into the money of alpha banks at a fixed exchange rate. Alpha banks make no such promise the other way. It's asymmetric redeemability. This means there cannot be an excess supply of beta money in […]
Worthwhile Canadian Initiative 
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