Category Nick Rowe
Do illiquidity and sticky prices go together? If so, why?
Some goods are easy to buy and sell quickly. They are liquid. Other goods are harder to buy and sell quickly. They are illiquid. Some goods' prices adjust quickly to changes in demand and supply. They have flexible prices. Other goods' prices adjust slowly to changes in demand and supply. They have sticky prices. 1. […]
Sticky prices vs sticky coordination; inflation vs NGDP targeting
Monetary policy matters (mainly) because of nominal rigidities. The simplest story of nominal rigidities is that (some) prices (or wages) are sticky. Firms want to change prices when a shock hits, but there is some cost that makes it hard for them to do so. The object of monetary policy should then be to target […]
Iceland and the Loonie?
Some people in Iceland want to abandon the Krona and adopt the Loonie. This came as rather a surprise to me. Here are some thoughts off the top of my head:
Thoughts on Greece
Greece seems to have slipped below the front pages. We've moved on to other things. I haven't. I don't have much to say here, but I can't say nothing. This is too important. I'm just going to record my thoughts, for whatever little they are worth. I have been Googling around, trying to understand the […]
Money as store of wealth?
This is something that always bugs me with the textbooks' definition of money. They start out well. They provide a functional definition of money; "money is what money does". If people in a given time and place use cigarettes as money, then cigarettes are money, in that time and place. Moneyness is not a property […]
Update on PBO Report on benefits for the elderly
Since my original post on the PBO Report (pdf), I have had a very useful email exchange with Chris Matier, the author of the Report. (It is to the PBO's credit that they really do want people to understand what they are saying, and are prepared to spend the time to help us.) This post […]
Three questions on the transmission of business cycles
I've been mulling this over for the last couple of weeks. I haven't really come up with a clear answer. So I thought I would just throw it out there. I've got three questions. The most important question is the third question. 1. Assume I am an individual household or small firm, and that I […]
Why is CPP funded, but OAS is Pay As You Go?
(Non-Canadians: this post is for you too, even if you don't know what CPP and OAS mean. They are both pensions for old people. There is only one relevant difference between CPP and OAS, and I discuss it below.) My (very amateurish and random) reading of stuff related to my previous post on Old Age […]
The PBO Report on sustainability of benefits to the elderly
The Parliamentary Budget Office has released a Report (pdf) on the fiscal sustainability of benefits to the elderly. This is not my area. I don't have a lot to say on the subject. I want to say a couple of things.
The mute king
Once upon a time there was a king. He was king because his father had been king before him, and his father before that. It was just kings, all the way back. The king gave orders, which people obeyed, because he was king. The king gave good orders, and because the people obeyed those orders, […]
Worthwhile Canadian Initiative 
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