Oscar Landerretche is an awesome economist from Chile. Below is an excerpt of his participation in a video forum with Brad DeLong on the Politics of Inequality in 2012. Since then he has become the President of the Board of Directors for Codelco, the largest copper producer in Chile. He is currently dealing with the […]
One has to be crazy to disagree with Brad DeLong. Then, I must be crazy. He said… “After being wrong for eight straight years, critics of expansionary macro policies in a high-slack low-inflation economy–” Link It is true that if we look across America, we will see lots of slack and underemployment. Labor force participation […]
This is a comment on an article that came out yesterday called The equilibrium real funds rate: Past, present and future by James D. Hamilton, Ethan Harris, Jan Hatzius and Kenneth D. West. They talk about how difficult it is to determine an equilibrium real interest rate which is the real rate at full employment […]
Menzie Chinn wrote about various ways to estimate potential GDP. It becomes perplexing when an estimation shows that the output gap could be zero. Why? Because there are such weak inflation pressures… “That seems implausible to me, but then, so too does a nearly zero gap, given the lagging inflation rate.” – Menzie Chinn The […]
Since December of 2014, I have been tweeting that the Dow will orbit around an attractor level around 17,300… “Dow is in what I see as stable part of weightless orbit around 17,200… waiting for Fed communications” — Edward Lambert (@wisegrowth) December 17, 2014 “Dow heading toward attractor zone of 17,200 to 17,300 that I […]
One who makes comments on Angry Bear, William Ryan, said… “Besides I thought we have been in a slump since 2008 haven’t we?( I guess it depends on what sector of the economy we are talking about)” What sector has been in a slump? Middle and low incomes. Wages have been barely rising. Under-employment is […]
From what I read, nobody has pointed out the drop in Nonfarm Business Sector: Hours of All Persons in the 3rd quarter. (seasonally adjusted) The index of hours decreased from 110.66 to 110.53. This is actually noteworthy… Nonfarm Business Sector: Hours of All Persons since 1967. (link to graph) You can see that hours increase […]
The Fed rate… What is going on with the Fed rate? The Fed say they would like to raise it in December. Others say they should wait. Using an Effective Demand Version of the IS-LM curve In a normal IS-LM model, the interest rate is on the y-axis and output on the x-axis. The following […]
Yes, demand is high for safe assets and this is in part driving down interest rates. Labor share is the key to solving the issue. Briefly… Labor share is fallen in the US and other advanced countries, including China. Inequality of income has widened. The excess money at the top is driving the demand for […]
An article came out today by Ricardo Caballero, Emmanuel Farhi and Pierre-Olivier Gourinchas, called On the global ZLB economy, where they talk about how a liquidity trap scenario can spread globally.They see a high demand for safe assets over their supply. “The growing global shortage of safe assets imparted a strong downward secular trend to […]