Robert Waldmann The word “liquidity” is slippery, since there is not a single solid agreed definition. “Liquidity” refers to different things each of which is very important. I have long been fighting the suspicion that confusion of the various meanings influences the policy debate. I have lost the fight and now express the suspicion. Briefly, […]
Robert Waldmann I don’t have a very positive view of innovative financial products, or rather, of financial products invented in the past 20 years or so. However, I love mortgage bonds (MBSs). I think they are an excellent way of diversifying and eliminating risk. However, I have to admit that they create a problem. Since […]
Robert Waldmann Below I ask why the argument that the stimulus must crowd out private spending because output can’t be higher than aggregate supply hasn’t been made (or made more often if I missed it). So now I will try to make that argument. One rule is that I must concede that there are unemployed […]
Robert Waldmann is still wondering why eminent economists have been making such implausible arguments. Eugene Fama’s mad predictions based on an accounting identity (and forgetting that the value of goods which firms produce but can’t sell is counted as inventory investment). Then Eugene Fama asserted that the velocity of available funds or something is constant. […]
Robert Waldmann Some people around the web are suggesting that the desperate times call for desperate measures and say that US should just print money to save the banks — risk of hyperinflation be damned. What exactly do they think we have been doing ? For example Reader .A.M writes to the incredibly smart Matthew […]
Robert Waldmann I have long thought that the nuclear option for the Democrats to crush the Republicans was to reform the tax code so most families pay negative income tax. Now I learn that they have very nearly done that. Via Ezra Klein STEPHEN OHLEMACHER reports for AP. WASHINGTON (AP) — A typical American family […]
Robert Waldmann Having demonstrated an ability to find amazing patterns in numbers from baseball and polls, Nate Silver turns his attention to the stock market. He finds mean reversion in day to day prices since 2000 ! That is evidence of over-reaction and a correction. Amazing ! more after the jump. Now Silver knows he […]
Robert Waldmann If this article by REED ABELSON in the NY Times is correct, health insurance companies are basically begging for the H Clinton health care plan. Now I’m old enough to remember that things looked good in February 1993, but it seems that Obama’s opposition to a mandate was (accidental ?) genius. The plan […]
Robert Waldmann Brad DeLong has a question. He is impressed by Christine Romer’s latest speech but he doesn’t believe the huge estimate (on the order of 3) of the tax cut multiplier in Romer and Romer 2007 (warning pdf). He suspects that they left something out. I agree that the evidence for large multipliers (on […]
Robert Waldmann wrote earlier In defense of George Will’s claim “According to the University of Illinois’ Arctic Climate Research Center, global sea ice levels now equal those of 1979.” Post ombudsman Andy Alexander provided this link http://arctic.atmos.uiuc.edu/cryosphere/global.sea.ice.area.pdf** to a *one page* document which includes the text “However, observed N. Hemisphere sea ice area is almost […]