First “two Keynesian” is a phrase which only I use. It means a new Keynesian model with two periods the present and next period and forever after when the economy is in steady state. I recently noticed that Krugman’s models, which are much simpler than models I can think up and which have clarified my […]
The Federal Reserve Bank of San Francisco published a letter titled, Consumer Inflation Views in Three Countries, written by Bharat Trehan and Maura Lynch. The letter explores inflation expectations among consumers in the UK, US and Japan. Basically the story is that inflation expectations by consumers are tied to the level of oil prices and […]
Mike Sankowski has been banging his spoon on the high chair about this forever. And rightly so. Repeat after Mike. And keep repeating it to anyone who will listen. The “higher-corporate-profits = jobs” meme is perhaps the most pernicious falsehood in political economics. How Business Owners Think For almost ten years I was co-founder and […]
HENRY GIROUX: Oh, I mean, I think that’s the biggest lie of all actually. The biggest lie of all is that capitalism is democracy. We have no way of understanding democracy outside of the market, just as we have no understanding of how to understand freedom outside of market values. I learned about two maps […]
What if an economist expects the natural level of real output to be higher? How would the natural rate of interest change by expecting a lower natural rate of output? First, I personally expect a lower natural limit upon real GDP. I see that real GDP is trending on a new normal level below the […]
Economists are thinking that the natural real interest rate might be negative… one factor that would lead them to think that way is that the economy is growing so slow. The principle behind that is this… if the real Fed rate is above the natural rate, the effect is contractionary upon real GDP. So if […]
The economy is nearing the natural level of real GDP and economists are saying that the natural rate of interest is negative. Now the natural rate of interest is the equilibrium interest rate when real GDP reaches its natural level. It is absolutely crazy to think that the natural rate would be negative… absolutely crazy. […]
Okay, once again I’m going to sacrifice my body here, risk looking stupid by asking what seems to me to be a vexatious question. Here’s the setup: When you exchange some of your money (bank deposits) for some shares of Apple stock, those shares aren’t removed from the supply of Apple shares. (Likewise your “money”; […]
I have written before about the gross waste of taxpayer monies on retail in the St. Louis region. According to the East-West Gateway Council of Governments (p. 18), governments in the bi-state metropolitan area pumped about $2 billion worth of subsidies into retail projects from 1990 to 2007, but only saw a net increase of […]
Lifted from Robert’s Stochastic Thoughts New Keynesian Good Two Keynesian Better Oddly, Paul Krugman seems to have perceived my observation that he is a two Keynesian rather than a new Keynesian as a criticism. In fact I much prefer simplest new Keynesian models to standard obscure new Keynesian models. Oh hell, my damn comment was waaay too […]