Robert Waldmann Krugman worries about deflation. He performs a simple calculation Now here’s the thing: the slump of the early 1980s produced the Great Disinflation, which brought the core inflation rate down from about 10 to about 4. This time, however, we entered the slump with a core inflation rate of about 2.5 percent. If […]

Robert Waldmann dares comment on Paul Krugman’s Optimal Fiscal Policy in a Liquidity Trap. Krugman argues that, when we are in a liquidity trap, the fiscal authority should use expansionary fiscal policy to keep the unemployment rate exactly at the NAIRU. Since writing the post, Krugman has been wondering why Obama is so much less […]

Robert Waldmann Brad DeLong boldly attempts to exhaustively list the factors which can affect the value of a fixed income asset. This is some Mac generated i document and I can’t cut and paste. Go here and search for “there are four”. The four are called “default”, “the safe real interest rate”, “risk”, and adverse […]

By Spencer It is hard to find anything positive about this employment report. Maybe the best news is the nominal weekly earnings only fell by 0.3%. Since the peak in employment in November household employment has fallen to 97.7% and isnow worse than the declines in the 1974 and 1981 recessions. Employment growth is worse […]

written by cactus and Emily Trader One of the advantages of participating in a blog community is to read the variety of voices that also participate. This blog not only has a stable of writers (which has changed over the years), but it also has a number of regulars who leave comments (or send e-mail […]

by spencer For several years bond yields were on a glide path well above the inverse of the 1950-1980 yield increase–the dotted line versus the solid line. I thought it would take a Japanese style depression scenario for yields to fall to the solid line glide path. That now appears to be happening.

rdan Link for information on infrastructure spending projects. More information to ponder.

rdan I apologize for just the link, but this note on Japan is worth a look on production and deflation figures.

rdan The Washington Post reports a set of guiding principles for the rescue is in the works: Geithner has been working night and day on the eighth floor of the transition team office in downtown Washington with Lawrence H. Summers and other senior economic advisers to hash out a new approach that would expand the […]