Category Nick Rowe
What we research, and what we believe
Suppose you believe in theory X. You want to do research in theory X. But all the interesting ideas in theory X have already been well-researched. You can't think of anything interesting and new to say about theory X. There might be some unresolved problems in theory X that need to be tackled. But you […]
Eurozone Adjustment Asymmetry
Adjustment to resolve asymmetries should be symmetric. Both sides should adjust. But sometimes it isn't symmetric. One side may choose to adjust; but the other side is forced to adjust. Like under the Gold Standard. So if the Eurozone does break apart to resolve the asymmetry: I think it will not be through Germany choosing […]
New Keynesian Macroeconomics, with and without barter.
[Update 4 December: after long arguments with Adam P., which finally started to bear fruit in the comments of December 4th, I'm now clearer on what's essential in this model about the difference between "monetary exchange" and "barter exchange". It's this: In monetary exchange, there is no restriction on what the seller can do with […]
Beyond Magneto Trouble
Paul Krugman and Brad DeLong have both written very good and very depressing posts. The economy had magneto trouble. We failed to prevent it; and we failed to fix it. Their posts are about why we failed to prevent it and why we failed to fix it. Suppose either of them are right in their […]
Monetarism: the hegemony that need not speak its name
Fish don't feel the water they swim in. (I've heard that's false, but it's too good to check). Paul Krugman does not feel the Monetarist hegemony he swims in. The only part of Monetarism that he does feel, and that he now identifies with Monetarism, is that one small part of Monetarism that failed to […]
Can the EU survive?
Just for once, this is not a question best left to the Poli Sci. Because the main forces will be money/macro. For nearly two years now, I've been worried that one or more of the Eurozone countries might do an Argentina. I've been asking whether the Eurozone could survive. I think it's time to change […]
Plastic and glass
It seems the Eurozone troubles are heating up again. Debt is like glass. If you hit it with a small shock it stays rigid. But if you hit it with a big shock it breaks. Equity is like plastic. If you hit it with a shock it bends. The bigger the shock the more it […]
Instrumentalism
It's amateur psychology hour. Sorry. In economics there are two reasons for doing something: because we enjoy it (taking a holiday at the beach); or because it is a means to an end that we enjoy (working to pay for the holiday at the beach). It's an instrumentalist perspective.
Some thoughts on the Gauti Eggertsson & Paul Krugman paper
It's an interesting paper (pdf). It's a very standard New Keynesian macro model with one twist. It's a twist worth doing. There are two types of people: the impatient, who borrow from; the patient. And there's an exogenous limit to the debt the impatient are allowed to accumulate. It's a math model, of course. I'm […]
Four questions for the Bank of Canada
Three of those questions are questions the Bank of Canada is asking itself (and anyone else who cares to listen). I want to add a fourth. The Bank held a workshop yesterday. Stephen and I attended, along with a few dozen other Canadian economists. It was about the Bank's inflation targeting framework, which comes up […]
Worthwhile Canadian Initiative 
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