Via Daily Kos, we learn that Wikileaks has released the investment chapter of the Trans-Pacific Partnership (TPP). This is a critical chapter, as it was in the North American Free Trade Agreement (NAFTA), because it establishes investor-state dispute settlement (ISDS) mechanisms. Despite its neutral-sounding name, ISDS is actually a radical concept. Instead of using the […]
I commented on Brad DeLong commenting on Dean Baker asking Brad Delong a challenging question. Brad decided my comment belonged on his front page, so I guess it belongs here too. Baker wrote Brad DeLong tells us that he is moving away from the cult of the financial crisis (the weakness of the economy in […]
Fed’s interest earnings approach $100b WASHINGTON — The Federal Reserve said Friday it transferred a record $96.9 billion to the U.S. treasury in 2014, profits on its unprecedented $4.4 trillion in holdings designed to support the U.S. economy in the aftermath of the Great Recession. Returning to a topic I have raised a few times […]
Alice Rivlin has a wonderful speech about Fiscal & Monetary Policy in a Post-inflation World. Her basic point among many keen insights is that financial instability should be more of a priority now than inflation. I agree with her. Monetary policy should focus on the wild beasts of the economy, not the domesticated pets. Inflation […]
Uber wonk Matt O’Brien writes about The “weird way people talk about zero interest rates” He discusses Gillian Tett discussing her conversations with those who O’Brien calls the “the masters of the universe.” They don’t like the Fed’s extremly low interest rate policy. They can’t claim that loose monetary policy has causes excessive inflation, so […]
by New Deal democrat The Phillips curve in 3 dimensions, animated – Yesterday I wrote that the Phillips curve might best be considered as three-dimensional, where the third axis was commodity prices, and in particular Oil. A shock to underlying commodity prices would also “shock” the unemployment vs. inflation trade-off, moving the curve along the […]
by Joseph Joyce Global Stability, National Responsibilities The global financial crisis demonstrated clearly how the flow of money across borders could deepen and widen a financial crisis. A decline in U.S. housing prices led to a re-examination of the safety of financial securities based on them and an implosion in credit markets as financial institutions […]
by New Deal democrat The Phillips curve in the 21st century (or, The Phillips curve as a 3 dimensional foil) This is my third post about the possibility of the Fed raising rates as early as June. In the first post, I pointed out that both wage growth and inflation are at historic, half-century lows. […]
If the Fed raises interest rates and marginal companies are pushed into struggling for survival, is this a bad thing? Won’t we lose jobs? Won’t wages be hurt? Well, the question is… Are the healthier companies (those that can better survive a higher Fed rate) willing to make employees happier? Well, we now have a […]
The Flow of Funds report from the Federal Reserve came out today for the 4th quarter of 2014. Non-financial business debt grew quite fast. “Non-financial business debt rose at an annual rate of 7.2 percent in the fourth quarter, a somewhat larger increase than in the previous quarter. As in recent years, corporate bonds accounted […]