Paul Krugman argued that optimal fiscal policy in a liquidity trap targets unemployment equal to the non accelerating inflation rate of unemployment (NAIRU). He uses a model with Ricardian equivalence. This means that the public debt does not affect consumption. When he wrote his post, I said I thought his conclusion depended on this assumption. […]

Robert Waldmann Don’t say you weren’t warned. I am trying to understand the effects of the switch from mechanically controlled machine tools to electronically controlled machine tools and then to digitally controlled machine tools. I don’t really know much about machine tools, but, then again, I don’t know much about firms or the business cycle […]

by Bruce Webb A lot of progressives insist that there is a simple golden-bullet solution to the health care crisis. All we need to do is substitute the 30 page HR676 Single Payer/Medicare For All bill for the 1990 page HR3962. Which led me to ask “How can you possibly supply code language to overhaul […]

Via Greg Mitchell’s Twitter feed, lying isn’t just for the IB branch any more: Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman’s then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003. Unable to identify a […]

by Rebecca Central banks across Asia are concerned and actively engaged in some kind of currency manipulation – direct intervention, quasi-capital controls, and/or public speech (I will refer to this later, but RGE published a great article to the fact) – as investors flock to global capital markets seeking the “risk-on” trade. Central banks are […]

Rdan

by Bruce Webb In the near four months since it passed out of Committee there has been little discussion of the Senate HELP Bill and the reason is clear, Max Baucus made it clear that Senate Finance would write a bill from the ground up. What this has meant is that the basis for comparing […]

UPDATED Divorced one like Bush wants to know how accurate the polling was that came up with a consensous that the GDP rose 3.5% in the third quarter. I did my own poll last night at band practice and 100% of the self employed band members (only one for an employer and that’s the public […]