One hears that the Federal Reserve would like to normalize the Fed rate. What does that mean? How can we conceptualize that? Well, there are many ways to conceptualize it, but here is a simple way using measures of the growth of nominal GDP (NGDP). In normalization, the Fed rate will rise to the growth […]
Normalizing the Fed Rate: This Time is Different
Poverty and Brains
I think it is best to just click and read this. In a study published this year in Nature Neuroscience, several co-authors and I found that family income is significantly correlated with children’s brain size — specifically, the surface area of the cerebral cortex, which is the outer layer of the brain that does most […]
Whose Inflation Expectations ? *
Janet Yellen gave a speach which has received a lot of attention and not just because she is one of the most powerful people in the world. I agree with Lorcan Roche Kelly that the best parts are footnotes 28 and 26. I got into a twitter debate with Andy Harless who was unconvinced by […]
Open thread October 2, 2015
Where MMT Gets Its Accounting Wrong — And Right
Modern Monetary Theory has been revolutionary in economics, and its influence is — beneficially — ever-more pervasive. It has opened the eyes of a generation to a clear-eyed, accounting-based methodology that trumps dimensionless theory, and has brought a deep, nuts-and-bolts understanding of money, debt, and financial institutions to a discipline where that understanding has been inexcusably […]
Inequality for All, the film
If you do not know, Prof Reich’s film is currently up on youtube. I just watched it. For most readers it is nothing new. But for the masses this is a great film. Plus, I did not know that he literally went over on the same boat as Bill Clinton when they were going to […]
More on Weak Productivity & Labor Share of Income
There is a post by Dietz Vollrath, Labor’s Share, Profits, and the Productivity Slowdown. D. Vollrath has some math there for how a decline in labor share along with a rise in aggregate mark-ups can show that productivity growth is slowing. Mark-ups are the price over marginal cost. Normally in perfect competition, price is equal to […]
People who are published in newspapers who don’t make proper use of published data
“Pundits are regularly outpredicted by people you’ve never heard of. Here’s how to change that.” is a very interesting article at the monkey cage by Sam Winter-Levy and Jacob Trefethen. (h/t @MarkThoma) They note a study of people you’ve never heard of vs intelligence analysts (not pundits) and write accountability. While many pundits may not […]