Category Nick Rowe
Calvo vs Mankiw/Reis, and IT vs PLPT/NGDPLPT
An economy is humming along very nicely in full long run equilibrium. All real variables are at their natural rates. Actual and expected inflation are both equal to the 2% inflation target. As the years go by, the price level goes: 90, 92, 94, 96, 98, and everybody expects it to continue 100, 102, 104, […]
Joint outputs
There's something a bit weird about the way we normally do economics. Or maybe it's just the examples we normally use. My mind isn't quite clear on it yet. So I'm writing this blog post. We usually talk about multiple inputs producing one output. Labour, land, and capital are inputs used to produce apples. Three […]
Reswitching and the term structure of interest rates
Treat this as a rough draft, on a topic I haven't thought much about for over three decades. The punch line is at the end. I may be wrong (of course). A farmer considers whether to switch to a new technique for growing food. Compared to the old technique, the new technique would produce less […]
How I spent my gap year
Some economists think the 1871 revolution was a big mistake, and led economics down the wrong path. They take their inspiration from pre-1871 economics, especially Ricardo and Marx, and proceed from there. Many of them are very smart and knowledgeable people. They think that most academic economists ignore them and know little or nothing about […]
Why does repo exist?
Today's dumb question from the back of the Finance class. (But I would guess some other students might not know the answer either, and some maybe hadn't even thought of the question). [Update: just to be explicit, I am not asking why lenders want security for loans. I am asking why I don't sell my […]
No, you may not speak to my class
Because I would be abusing my authority if I said "yes". So you shouldn't even ask. [Updated: see below] This post is about teaching economics, though it could be about teaching anything else. It's also about allocating scarce resources between competing ends, which is the subject matter of economics.
Whatever happened to Price Level Path Targeting?
Before the recession, Inflation Targeting was the Champ, and Price Level Path Targeting was the Challenger. A strong Challenger. The Champ was the champ, but the Challenger had a lot of support. A lot of people thought he should and eventually would replace the Champ. People argued about who was better overall, but all agreed […]
Can we understand agent-based models?
[Updated. See below.] [I wrote this because we were starting to discuss the question in comments, and I thought it was interesting, so tried to collect my thoughts. No great original insights here. Nor even any conclusions, right or wrong. Read at your own risk. This post is really just a place for people who […]
Wot about the capitalists?
I just read Matt Yglesias "Monetary policy complacency is the conventional wisdom" (HT RA of The Economist) piece in Slate. It's depressing reading. "On one team are the leaders of the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England. Alongside them are the political leaders of the United […]
New Keynesian vs Neo-Wicksellian macroeconomics
I am not going to disagree with Simon Wren-Lewis. There is a lot of merit to his perspective on what New Keynesian macroeconomics is really about. But I want to put forward a very different perspective that I think also has a lot of merit.
Worthwhile Canadian Initiative 
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