Category Nick Rowe
Mark Carney and NGDPLPT
Mark Carney said: "If yet further stimulus were required, the policy framework itself would likely have to be changed.19 For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP […]
Triangles, rectangles, trapezoids, stripes, and gaps.
I liked Steve Williamson's post on gaps and triangles. But I think about it a bit differently.
Defending Hayek against the Austrians
[I wrote this post several days ago, as an afterthought in what JP Koning calls "The great monetary injection debate of 2012". Then I sat on it. Not just because it's a bit ad hominem/gotcha!. I'm not sure it's quite right. Anyway, with that caveat, I'm just throwing it out there, to see what readers […]
Capital-biased technical change vs low interest rates?
Paul Krugman says that recent technical change has been capital-biased. That robot story sounds plausible to me too. But if so, why are real interest rates so low? (Yes I know there's a global recession on, but real interest rates were falling even before the recession). Maybe we are forgetting a third factor, land, and […]
Darwin = Malthus + Sebright? Diffusion of technical change.
Just throwing out some random ideas, on subjects I know little or nothing about, that are only vaguely related, hoping someone better than me might pick some up and run with them properly. Read at your own risk.
Cantillon effects and non-SUPER-neutrality = does fiscal policy matter?
Scott Sumner and Bill Woolsey have been fighting valiantly against the Austrians. The fight is about "Cantillon effects" — non-neutralities of money that are supposed to arise not from the increase in the money supply itself but from where exactly that new money enters the economy. Sometimes you get a clearer answer to a question […]
Focal Points and the Short Run Phillips Curve; NGDPLPT beats PLPT
Suppose every firm gets surprising news: after having been flat for years, the central bank will raise Nominal GDP by 10% next period, and hold NGDP constant thereafter. How will firms respond? The Calvo Phillips Curve says that 90% of firms will hold their prices fixed, because the Calvo fairy won't give them permission to […]
A post for Steve Keen
I hesitated a lot before writing this. How to write it? Should I write it at all? Then I thought: "What would Arnold do?". I will probably fail, but I'm going to try anyway.
$600b debt x (2% inflation + 2.5% real growth) = $27b
Just a little bit of simple debt and deficit arithmetic. Let's adjust the deficit for long run inflation and long run real growth. That cuts the deficit by around $27 billion.
Four MC curves and two PPFs
Just another "Teaching" post. Because it's needed. (Though I have never taught micro beyond first year.) Marginal Cost means the change in Total Cost per extra unit of output. MC=dTC/dQ. (Not to be confused with Average Cost, which is the level of Total Cost divided by the level of output. AC=TC/Q.) Do MC curves slope […]
Worthwhile Canadian Initiative 
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