Category Nick Rowe
Why the distribution of reality is skewed and so newspapers are biased towards bad news
"News" is the difference between what happens and what you expected to happen. If you have rational, and hence unbiased, expectations, then the news, on average, should be neither good nor bad. The good news and the bad news should cancel out. So why does the news that gets reported seem mostly bad news? Does […]
Bryan Caplan and Joseph Stiglitz
OK, I've said that Joseph Stiglitz gets Aggregate Demand wrong. It's only fair that I say that Bryan Caplan gets AD wrong too, for much the same reason. Where are you Mark, Paul, and Brad? Seriously, you're not allowed to do any posts criticising Bryan Caplan for this, until after you have said that Joe […]
The gizmo theory of the recession
I've just come up with a new theory of what caused the recent recession. There was a technological improvement in making gizmos. The productivity of gizmo producers increased, so the price of gizmos fell. The demand for gizmos is price-inelastic. So total revenue from gizmo production fell. So incomes from producing gizmos fell.
SRAS/SRPC; levels vs rates of change
Something's been puzzling me about the data for the last couple of years. (This post isn't very clear, sorry. I can't even get my head clear enough to explain clearly what's unclear to me.) There are two curves in short run macroeconomics: the AD curve, and the "other" curve. This post is not about the […]
What is a (Eurozone) “structural deficit”, again?
I don't have much to say about the latest EU "agreement" that hasn't already been said. To me, it looks just like the old "stability and growth pact" warmed over, and with a bunch of judges having to approve budgets. (Does this mean we are going to leave fiscal policy to the lawyers? Do they […]
Low vs falling prices, and relative vs absolute prices, Intro Econ again
The discussion of Intro Economics in my last post got a bit esoteric at times. I want to bring us all back down to earth. This morning I got an email from a student who took my Intro Economics course last year. He works in retail, selling hi-tech goods. He asked me this question: hi-tech […]
God and Man at Harvard
60 years ago an undergraduate at an "Ivy League" US university didn't like the economics and politics that were being taught there. He didn't boycott classes. Instead he wrote a book about it. The full title of William F. Buckley's book is "God and Man at Yale: the Superstitions of 'Academic Feedom'". (I haven't read […]
Blue sky money two – money and not banking
Banking is a subset of finance. Money and finance go together. Money and banking go even more together. But they don't have to go together. Maybe they didn't ought to go together. Finance is unstable. Banking is even more unstable than the rest of finance. A bank makes promises it knows it might not be […]
Why has (private) debt increased?
I'm not talking about government debt. I'm talking about the debt of households and firms. And I'm talking long run, not just the last few years. Over the last several decades, the ratio of debt to GDP has increased a lot. Not just in Canada, but in most rich countries, as far as I know. […]
The political economy of nominal wage targeting
WARNING: if you are not a macroeconomist you may not understand this post, even if you think you do. This is especially true if you are not a macroeconomist but think you know something about "political economy". (When I hear the words "political economy" I usually reach for my shovel.*) This post is an experiment. […]
Worthwhile Canadian Initiative 
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