An article came out in the WSJ web site called Lenders Look to Fed Tapering to Lift Business Borrowing. One would think that tapering would discourage borrowing. Yet, we are in a situation where long-term low interest rates suppress borrowing. Here is the key line from the article referring to tapering… “Such a move would […]
The post is too good to excerpt so just go read it. To edit ruthlessly 1. The business cycle is not symmetric. [skip] 2. As much as the NBER methodology emphasizes the notion of recessions (which, by the way, is asymmetric in nature), most academic research is produced around models where small and frequent shocks […]
From the Economic Populist: The Latest Never Ending Adventures in Corporatism Via the TPP – Wikileaks has published more secret Trans-Pacific Partnership Agreement documents, revealing more and more how the United States represents large corporations and not the citizens of the nation. The Huffington Post published a large front page story is on the Trans-Pacific […]
The future of monetary policy is troubling. I present a video to explain. (Part 4 of a series on the journey of the Fed rate from 1978 to the present.) Since the 1960’s, the Fed rate has consistently reacted to the natural level of real GDP (in terms of labor and capital utilization). Effective demand […]
What does or would it mean to say that Social Security was ‘solvent’? Under the rules that govern the Trustees of Social Security the test for any given year is pretty simple: did or will the year end with all obligations/cost met while still retaining assets equal to the next year’s cost. To determine this […]
Recently I wrote several posts about macro models with optimizing agents but with downward nominal rigidity. I’ve putten the thoughts together here (pdf warning) with greek letters and subscripts (but without an equation editor). Here is an updated effort (still a pdf)
When you hear people talk about the Global Savings Glut, you can be quite sure they are talking about monetary “savings” — the global aggregate stock of money embodied in financial assets. What they don’t seem to realize is that the net holdings of global financial assets minus liabilities — claims and counterclaims — is […]
Joseph P. Joyce (is a Professor of Economics at Wellesley College and the Faculty Director of the Madeleine Korbel Albright Institute for Global Affairs Guest post: Speaking Truth to Power When the full history of the European debt crisis is related, one important part of the story will be the uneasy relationship of the International […]
From author Heidi Shierholz at Economic Policy Institute: A blog post by Pedro Nicolaci da Costa in the Wall Street Journal highlights findings from a paper from the Federal Reserve Bank of Philadelphia that much of the shrinking of the U.S. workforce has been due to workers retiring early… … I’ve looked at the breakdown […]
The story of how the Fed controlled inflation after the 1970’s is long. Below I present a perspective that you probably have never seen. I have never seen it presented. The story uses the monetary model of effective demand to show how the Fed lost control of inflation in 1978 and then was able to […]