In the post below, I discuss a very strong correlation in the data which surprised me — a high ratio non residential fixed capital investment to GDP is correlated with high nominal interest rates on corporate bonds. I think the discussion in comments was very interesting and I have promised to pull back 2 comments […]

In a recent post, I noted that actual non-residential fixed capital investment doesn’t show the pattern one would expect based on optimizing models at all. Ugh that sentence was convoluted and so is the post it describes. In fact, the puzzling pattern is really very simple. Non residential fixed capital investment (nrfinv) is high when […]

The Ruble is collapsing. This will do dramatic damage to the Russian economy, because many Russian firms have dollar denominated debts. This is a familiar story. Something similar happened in East Asian countries in 1997 and Russia in 1998. There is no good policy response, because defense of the Ruble based on extremely high interest […]

As promised below, I have written something about investment (warning google document) In the note, I calculate some variables related to discounted future profits. Here is a snip from the paper in which I define them. Standard micro founded models of investment are based on shareholder value maximization and assume that there are adjustment costs, […]

The topic of this post might be “procrastination.” I have written a bit about aggregate consumption in the USA and I keep telling myself to write something similar about investment. I never do. I am using this post as a pre-commitment device (sorry to use the blog for my personal problems).

If the law is against you, pound the facts If the facts are against you, pound the law If the law and the facts are against you, pound the prisoners.

It seems that the most recent employment report has convinced several* economists that there is a high risk that the Fed Open Market Committee (FOMC) will raise the target Federal Funds rate soon. Paul Krugman There will, predictably, be calls to respond to the good news by normalizing monetary policy, raising interest rates soon. And […]

Update: Incredibly embarrassing and rude misspelling corrected all credit due to Robert in comments who sure is different from Robert who is now typing. Noah Smith writes better than I can and in particular that Nobel-winning economist Paul Krugman recently claimed that John Maynard Keynes — or the general idea of Keynesianism — is winning […]

In this rather long post Brad (who writes faster than most people can read causing potentially inefficient fixed pixel formation) Brad spends an odd amount of time critiquing some neo-Austrian and Singer the inflation truther. But then he discusses the thoughts Bernanke and Summers, which are well worth discussing. Ben Bernanke says that there is […]

Hospitals are just not producing at the same rate they used to. In particular, they are not producing as many avoidable deaths. Wide-ranging efforts to make hospital care safer have resulted in an estimated 50,000 fewer patients dying because of avoidable errors in the past three years, according to a new report presented by government […]