In the post below, I discuss a very strong correlation in the data which surprised me — a high ratio non residential fixed capital investment to GDP is correlated with high nominal interest rates on corporate bonds. I think the discussion in comments was very interesting and I have promised to pull back 2 comments […]
In a recent post, I noted that actual non-residential fixed capital investment doesn’t show the pattern one would expect based on optimizing models at all. Ugh that sentence was convoluted and so is the post it describes. In fact, the puzzling pattern is really very simple. Non residential fixed capital investment (nrfinv) is high when […]
After watching the new video with Adair Turner from a talk he gave at the Bristol Festival of Economics in November 2014, it is clear he understands the economic situation better than Paul Krugman. While Krugman tries to understand if inequality even leads to more financial instability (link), Turner knows that it does and the […]
Thought people would find this of interest. This is not updated from September being the last observation. In 1999 when this bottomed West Texas Intermediate was under $12/bbl and gasoline was under $1/ gal.
A new report by Good Jobs First shows how the very wealthy in America have benefited from government subsidies as one element in building their fortunes. According to the study, the 11 richest Americans, and 23 of the 25 richest, all have significant ownership in companies that have received at least $1 million in investment […]
This video was published on Youtube a week ago and has only had 27 views. The video is of a talk Adair Turner gave in November at the Bristol Festival of Economics. It reflects his current insights. He gives explanations for 4 big patterns developing in the global economy. Increased Inequality Rising ratio of wealth […]
The markets wait for the Fed’s statement in 30 minutes. Some thoughts beyond low inflation and an active labor market… Fed must give forward guidance to normalizing the Fed rate. Yet, any sense of disciplining the markets will be met with lower stock values. The markets need discipline which is part of the normal process […]
I reflected in a post last week that we should have had less accommodative monetary policy and more fiscal policy since the crisis… Thoughts on Investment, IS-LM & Effective Demand. Today Paul Krugman also had what appears to be a moment of reflection upon monetary perspectives… The Limits of Purely Monetary Policies. He recognizes the […]
The Ruble is collapsing. This will do dramatic damage to the Russian economy, because many Russian firms have dollar denominated debts. This is a familiar story. Something similar happened in East Asian countries in 1997 and Russia in 1998. There is no good policy response, because defense of the Ruble based on extremely high interest […]
From WSJ, low oil prices can be locked in for a year… (link) Remember, it also depends on what currency you buy the oil with… The US dollar is getting strong, while some emerging market currencies are getting weak. Comparative advantage suddenly increased for US firms?