Blog Profile / Interfluidity
| URL : | http://interfluidity.powerblogs.com | |
|---|---|---|
| Filed Under: | Business & Finance / Economics | |
| Posts on Regator: | 219 | |
| Posts / Week: | 0.8 | |
| Archived Since: | June 7, 2008 | |
Blog Post Archive
Michal Kalecki on the Great Moderation
So, it is to my great discredit that I had not read Kalecki’s Political Aspects of Full Employment (html, pdf) before clicking through from a (characteristically excellent) Chris Dillow post. There is little I have ever said or thought about economics that Kalecki hadn’t said or thought better in this short and very readable essay. [...]
Time and interest are not so interesting
I wanted to add a quick follow-up to the previous post, inspired by its very excellent comment thread. (If you do not read the comments, I’ve no idea what you are doing at this site; I am always pwned by brilliant commenters.) Cribbing Minsky, I defined the core of what a bank does as providing [...]
What is a bank loan?
When a bank makes a loan, does it create money “from thin air“? Are banks merely intermediaries, where “if people are borrowing, other people must be lending“? I consider these sorts of questions less and less helpful. Let’s just understand what a bank loan is, in terms of real resources and risk. Suppose I go [...]
Stabilizing prices is immoral
The first thing to recognize is that a policy of enforced “price stability”, whether implemented in terms of levels or rates, is a form of goverment-provided social insurance, just like unemployment or disability benefits. For all of these programs, there are states of the world in which some individuals might suffer misfortune. The government acts [...]
Great Britain as a case study: which sticky price?
Richard Williamson offers a report from the UK. Combining bits via Tyler Cowen and Williamson’s own excellent blog: I think there has been a lot missing from the discussion of the UK in the blogosphere. We are a bit of a puzzle on a purely AD-based explanation of the recession. We didn’t have deflation (on annual basis [...]
Two quick responses on choosing depression
Scott Sumner and Marcus Nunes suggest that our policy failures are in some sense just an “oops!”, that they result from a mix of mistaken theory, institutional frictions, personal quirks, and political forces rather than being, as I argue, a choice. I’d be more sympathetic if these “mistakes” were unique to the United States. Broadly [...]
Depression is a choice
I enjoyed Matt Yglesias’ suggestion that depressions are merely a technical problem that will go away once the obsolescence of cash eliminates the zero lower bound on interest rates, and Ryan Avent’s rejoinder. Although I’ve toyed with Yglesias’ view myself, I think that Avent has the better of the argument when he characterizes our [...]
A note on model risk, policy design, and political alliances
My previous post advocating a collaborative detente between post-Keynesians, market monetarists, and mainstream saltwater economists, has drawn smart and often skeptical comments. Some critics suggest I understate the dissimilarities between the three schools, and argue that any sort of fusion would amount to a muddled middle, centrism only for its own sake. (I like this: [...]
Because the stakes are so small?
People I admire were calling each other nasty names last week, so I cowered in the corner, put my hands to my ears, and hummed very loudly. I’m talking about the debate over money and banking that involved Steve Keen (1, 2, 3, 4, 5), Paul Krugman (1, 2, 3, 4, 5, 6, 7), Nick [...]
Zoning laws and property rights
A couple of weeks ago, I sat down and read Matt Yglesias’ The Rent Is Too Damned High and Ryan Avent’s The Gated City back to back. Both were a pleasure to read, for their content, and for the opportunity to kick a couple of bucks to two of my fave bloggers behind an ennobling [...]
Partial equilibrium intuitions about choice
I think it’s fair to say that economists, in general, are disposed to favor “choice”. It is easy to understand why. If you model the world as being composed of rational and well-informed optimizers of their own welfare, giving a person a new alternative cannot possibly harm her, and may well make her better off. [...]
Competitiveness is about capital much more than labor
Besides justifying labor-hostile monetary policy, unit labor costs are often trotted out to blame unreasonable wage expectations for troubled economies’ “lack of competitiveness”. For example, here’s a chart published last year by Paul Mason (ht Paul Krugman): It is a common trope that labor costs in the European periphery have grown to unsustainable levels, while in [...]
Restraining unit labor costs is a right-wing conspiracy
In an otherwise excellent post, Matt Yglesias commits one of the deadly sins of monetary policy: [M]y favorite indicator of inflation is “unit labor costs”… Unit labor costs are basically wages divided productivity. It’s not the price of labor, in other words, but the price of labor output. If productivity is rising faster than wages, then [...]
Starter Savings Accounts
So, here’s a thing I think we should do. The Federal government should offer inflation-protected savings accounts to individual citizens, but with a strict size limit of, say, $200,000. These accounts would work like bank savings accounts, and might even be administered by banks. But deposits would be advanced directly to the government (reducing borrowing by [...]
Haitao Zhang’s macro stabilization proposal
I first “met” Haitao Zhang seven or eight ago, when we were both frequent commenters at Brad Setser’s remarkable blog. After I wrote about NGDP targeting, Zhang forwarded to me a paper he composed and sent around several years ago. He has graciously given me permission to republish it. It’s an interesting piece, in the spirit [...]
Bad rhetoric
I’ve had a fair amount of feedback and correspondence following my recent posts on “opaque finance” (1, 2, 3). Much of that has been positive, though certainly many readers disagree with me and dispute my points. That’s par for the course. But I’ve had several letters outraged in a way that I haven’t so much [...]
Is opacity an excuse?
I’ve been getting a lot of concerned feedback from people I respect on my claim that status quo finance requires opacity and some degree of trickery in order to function. (See previous posts.) If prosperity is connected to “opaque, faintly fraudulent, financial systems”, is that an excuse for looting and predation by financial intermediaries? Won’t [...]
Opaque and stinky logorrhea
My previous post on opacity in finance attracted a lot of discussion, both in an excellent comment thread and throughout the blogosphere. Thanks. As usual, your comments put my drivel to shame. I thought I’d follow up (very belatedly, i’m sorry!) with some remarks on opacity in finance. This will be long and very poorly organized, [...]
Why is finance so complex?
Lisa Pollack at FT Alphaville mulls a question: “Why are we so good at creating complexity in finance?” The answer she comes up with is the “Flynn Effect“, basically the idea that there is an uptrend in human intelligence. Finance, in this view, gets more complex over time because financiers get smart enough to make [...]
The Eurozone’s policy breakthrough?
Today’s money quote, obviously, is this, from Fitch: a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach. Fitch’s view reflects the clear consensus of Anglo-American commentators. But Anglo-American commentators aren’t always right. Show More Summary