To add to the fire Jazz and Steve have kindled, YOY inflation is at its lowest level historically according to the BEA and Next New Deal blog. It does not look like we need austerity policies and a little fiscal fire might put people back to work and stir the economy into growth. “Last Friday, […]

Just read this too-modestly titled post, and all the links as needed, until you understand it all the way down to your bones: A quick note on “helicopter drops” Kudos also to David Beckworth and Cardiff Garcia. Cross-posted at Asymptosis.

From Aguanomics come these links: Fracking is coming to California in a big way. It’s likely that frackers will be heavily regulated on water quality; it’s ironic that farmers are worried that frackers may be polluting, what? More than them? Ironic, isn’t it? Climate change: “Warmer water will kill off most of California’s native fish […]

Sorry for the thin posting lately…I have had some SI joint problems which makes for difficulty sitting still to focus. Via Keven Drum comes this research paper addressing the issue of sticky wages in the economics of today: First off, a new paper by a trio of researchers confirms some old news: Adjusted for inflation, […]

Old news: April 3. But still: Following up on yesterday’s post, see here from Ambrose Evans-Pritchard in The Telegraph (emphasis mine): “All this talk of exit strategies is deeply negative,” [Woodford] told a London Business School seminar on the merits of Helicopter money, or “overt monetary financing”. He said the Bank of Japan made the mistake of […]

Part 1. The low standard deviation of GDP growth is simply an artifact of low GDP growth numbers. OK – that’s a bit over stated.   The low standard deviation of GDP growth is primarily an artifact of low GDP growth numbers Suppose you have a data set with values hovering around 13, with a […]

I’ve run into quite a bit of confusion in conversations discussing bank reserves, and found occasion to get precise on the usage in recent comments. I thought I’d share it with others. This has been vetted by several who are more worthy than I, so I feel quite confident in offering it up. 1. “Reserve […]

Economists like to say that their discipline is the study of scarcity, or even the science of scarcity. But I’d like to suggest that — acknowledging that it’s a behavioral, social “science” — it’s actually the study of human reaction functions: If X happens, how do people (individually and as groups) react? But unlike other […]

You know the trillion dollars a year of Treasury and GSE bonds that the Fed’s buying up? (And the $3-trillion+ it’s already holding?) It’s driving up bond prices and suppressing yields, right? And if it starts selling them back, it will drive down prices and increase yields, right? The market should be front-running that, right? […]

Some of the keenest monetary thinkers out there, over at FT Alphaville — Izabella Kaminska, Cardiff Garcia, etc. (I’ll even throw in Tyler Durden at Zero Hedge, with qualifications) — have been pointing us for years towards the work of IMF Senior Economist Manmohan Singh on collateral chains in financial markets. He provides wonderfully cogent explanation of […]