The normal Taylor rule takes into account the difference between inflation and a target inflation, and output and a targeted potential output. I will take a modified version of the Taylor rule and apply it to both capital output and labor output. First, capital output… Simulated nominal interest rate of capital = N + p […]
A simple rule of economic arithmetic that economists seem to studiously ignore: Inflation transfers real buying power from creditors to debtors, with nary an account transfer visible anywhere on anyone’s account books. Inflation means that debtors pay off their loans over time with less-valuable dollars — dollars that can’t buy as much bread, butter, and […]
Thomas Piketty’s important new book, Capital in the Twenty-First Century, predicts a bleak future of increasing concentrations of financial assets in few hands, stagnant wages and labor share of income, and declining returns to capital — secular stagnation. He enunciates and demonstrates the part of Marx that Marx got exactly right. But Dean Baker points out where […]
I would like to ask a question of the readers for their comments. Has aggressive monetary policy made labor less valuable? The idea is that cheap money for so long to investors has made profits easier to obtain, and that labor was not valued and rewarded as a means to produce profits. Therefore, wages held […]
Lifted from comments to Calculated Risks aside on cash for clunkers. Spencer says: I get so tired of seeing people evaluate the cash of clunkers and ignoring the impact on auto inventories. During the cash for clunkers auto and light truck inventories fell from 2.7 months of sales to1.6 months of sales — the norm […]
With the release of the Fed’s Open Market Committee Meeting minutes from 2008, it has been confirmed that the Fed was too concerned about inflation, and, to quote Marcus Nunes, “worse, the headline kind” leading into the 2008 crash. The Market Monatarists cite this as evidence that the Fed was responsible for turning a potentially […]
This piece in the New York Times caught my attention <a href=” http://www.nytimes.com/2014/03/06/world/europe/us-seeks-to-reduce-ukraines-reliance-on-russia-for-natural-gas.html?nl=todaysheadlines&emc=edit_th_20140306″>US seeks to reduce Ukraine’s reliance on Russia for natural gas</a>. It is a puff piece, but points to current conversation. From my reading it seems we would be shipping LNG to Germany and Europe? There is only one facility able to do that […]
Two more contributors to the revenue/tax cut conversation are Angry Bear’s jazzbumpa and New Economic Perspective‘s L. Randall Wray: Another look at Spending and Revenues JazzBumpa | January 31, 2013 9:00 pm This is more or less relevant to Beverly’s post from earlier today. How many times have you heard Boehner, McConnell, Ryan or one of […]
Ezra Klein offers a view of academic, journalists, and bloggers: Why aren’t journalists better at taking advantage of academic expertise? … The relationship between academics and journalists should be a happy symbiosis. The two sides are perfectly designed, in strengths and weaknesses, to support each other. Yet journalists, such as Kristof, are often frustrated by […]
by Joseph Joyce High Road, Low Road Among the many thorny issues that would arise if Scotland were be become an independent nation is the question of its choice of a currency. The first minister of Scotland claims that an independent Scotland would continue to use the pound. But Mark Carney, the governor of the […]