A comment on Olivier Blanchard, Eugenio Cerutti, and Lawrence Summers: Inflation and Activity–Two Explorations and their Monetary Policy Implications: update: Anne in comments said it was impossible to understand what, if anything, I concluded. My conclusion is was that Blanchard, Cerutti and Summers have found striking evidence of hysteresis. They reject the null hypothesis that […]
Noah Smith posted an article about Zombie companies in Japan. He recognizes that creative destruction must take place. Zombies must die. So bail outs of inefficient businesses must stop. “Japan’s cycle of bailouts must end.” Noah Smith, January 20, 2016 I agree and have written in the past about the Zombie companies weighing down advanced […]
The Clinton campaign is set to air this new, minute-long ad in Iowa and New Hampshire that has the feel of a closing argument: [picture from ad of a very solemn-faced Secretary of State Clinton standing next to Obama at the funeral of a fallen soldier or marine, and a link to the ad.] — […]
I wrote last summer that the Dow would not rise much above 17,300 and then eventually drop from that level into a recession. We see markets dropping now, but are they dropping into a recession or a resetion? What is a resetion? That is when the markets “reset”. Stock values have been high so at […]
[T]there are serious questions about how we’re going to pay for what we want to see our country do. And, I’m the only candidate standing here tonight who has said I will not raise taxes on the middle class. I want to raise incomes, not taxes, and I’m going to do everything I can to […]
I am fairly sure it is a coincidence, but current US GDP is not disappointingly low compared to an almost incredibly crude forecast based on data from before 1990. This graph (which you have to click more to see) shows the natural log of US real GDP and a quadratic trend estimated using data from […]
Most economists do not put stock in the stock market. That is to say that they do not include the stock markets in their analyses. Yet, economists should have a sense of what the markets will do if they are actually good economists. Economists seem to think that the stock markets are ruled by psychology […]
Larry Summers has been writing about Secular Stagnation for Two Years. This is the post which triggered the trialogue It is an excellent and important post, but I will just take the non technical definition of Secular Stagnation The core idea behind secular stagnation was that the neutral real rate had for a variety of […]
by Marco Fioramanti and Robert Waldmann This is the second to last post on the European Commissions DG -Ec-Fin estimates of cyclical unemployment for the purposes of calculating output gaps. This estimate is called unemployment minus the NAWRU (non accelerating wage inflation rate of unemployment). We will call unemployment – NAWRU “cyclical unemployment” even though […]
Even if his inspiration for doing so comes from (of all places) the HuffPo, This is spot-on: Unless something big and constructive in the way of global economic policy is done soon, we will have to change Stiglitz’s first name to ‘Cassandra’ — the Trojan prophet-princess who was always wise and always correct, yet cursed […]