This is Nick Rowe's Typepad Profile.
Join Typepad and start following Nick Rowe's activity
Join Now!
Already a member? Sign In
Nick Rowe
Recent Activity
Syriza could have said, a couple of months back: "So your deadline is June 30 when the current deal expires. OK, our deadline is June 21. Give us your best offer by June 21, and if we don't like it we will put it to a referendum on June 28, and let the Greek people decide yes or no. If it's yes we accept it and stay in the Euro. And if it's no we go back to the drachma."
Toggle Commented 4 days ago on Links for 06-29-15 at Economist's View
1 reply
Dan: yep. It's definitely "monetarist" in that broader sense. (We need a better word for that broader sense.)
1 reply
Thanks Brad! Dan: this isn't really a *monetarist* point. It goes beyond monetarism (and maybe some "monetarists" don't really get it, while some "keynesians" do get it). I actually learned it from people like Clower and his followers who were trying to figure out "what Keynes really (should have) meant".
1 reply
Thanks for that link anne. I too think it is excellent.
Toggle Commented 4 days ago on Links for 06-29-15 at Economist's View
1 reply
Hope Mark's OK, and is just taking a very well-deserved break. But it is strange.
Toggle Commented Jun 21, 2015 on 'Shared Security, Shared Growth' at Economist's View
1 reply
Dan: If the Fed bought (say) all the houses in the US, that doesn't mean everyone would be homeless. Those houses would still exist, and the Fed would (presumably) rent them out for tenants to live in. The Fed would earn rents on those houses, or dividends and if it bought stocks, just like it currently earns interest on government bonds. Now, some of us might not be happy with the idea of the government-owned central bank owning all the houses and capital stock, but if we don't like communism, we should propose a higher inflation (or NGDP growth) target, so people don't want to hold so much central bank currency, and would rather hold houses and capital instead.
Toggle Commented May 26, 2015 on Links for 05-26-15 at Economist's View
1 reply
That's tougher. I have far too many weak spots myself. Like economic history. But I think my favourite low-brow history show is on tonight: Time Team. (or one of its spin-offs). So I am going to retire from economics and watch it. http://en.wikipedia.org/wiki/Time_Team
1 reply
Robert: OK. You are right that such fluctuations are possible. And sometimes we even observe something similar at the micro level (no boys go to the disco because there aren't any girls there; and no girls go because there aren't any boys there). And maybe industrial clusters (hi-tech towns?) are like that too. But business cycles don't look like that. In a recession it's harder than normal to find buyers of illiquid goods (including labour), but it's *easier* than normal to find sellers of illiquid goods. It's money that is hard to buy.
1 reply
Done: http://worthwhile.typepad.com/worthwhile_canadian_initi/2015/03/david-levines-accidental-monetarism.html
1 reply
Thanks Brad! Notice something about this bit?: "What happens is clear enough: the phone guy produces a phone, trades it to the tattoo artist in exchange for a tattoo, who trades the phone to the hairdresser in exchange for a haircut, who trades it to burger flipper in exchange for a burger." In this economy, ***phones are used as the medium of exchange!*** OK, let's run with that metaphor. So the question is: ***Who is the (lazy) phone guy, who won't produce enough phones???*** It's the Fed.
1 reply
djb: I am afraid you are confused. Land is not capital; capital is land. A screwdriver is just land, shaped into a different form. And the labour that helped shape it into that form is itself a product of the land. Nick van Rowe
Toggle Commented Mar 4, 2015 on Links for 03-04-15 at Economist's View
1 reply
Dunno. But as someone whose knowledge if history is roughly that of "a California high-school student cribbing from Wikipedia" I find this stuff fascinating. But I don't understand how David Graeber's book got as far as it did if it's that wrong. Didn't publisher and editor get historians to review it first?
1 reply
pgl is basically right. But in the olden days macroeconomists like Friedman did not have formal models except those with perfect competition, so they had to wave their hands a bit when they talked about macroeconomics with monopoly power. But since 1987 we (the New Keynesians especially) have got those formal models with monopolistically competitive firms, and monopolistic (not perfect) competition is now the standard assumption in macro, but it turns out it doesn't really contradict what Friedman said, and actually makes it easier to see that what he said makes sense. (And the really weird thing is, if ALL firms become more monopolistic at the same time, their relative prices don't change at all (though output and employment falls), and the effect on inflation (if any) depends only on how the central bank responds to this.)
1 reply
anne: Paul doesn't mention inflation there. See Dan's comment below. Dan explains it as clearly as I can.
1 reply
Dan: yep. It's even (just) possible that both X and Y will fall, with Y falling proportionately more than X. We don't know until we say something about monetary (and other) factors.
1 reply
anne: that's the fallacy of composition.
1 reply
Thomas: " But fiscal "microeconomic knitting" will look a lot like "fiscal policy" during a recession because at low borrowing rates and shadow prices that are less than market prices for some inputs (unemployment), proper microeconomic decision making will result in lots of deficit financed investment in infrastructure, job training, etc." True. Government investment spending should respond to interest rates too.
Toggle Commented Dec 29, 2014 on Links for 12-29-14 at Economist's View
1 reply
Matt: take a 1 year $1,000 Treasury, for simplicity. Price = $1,000/(1+yield) Yes. Price and yield are mathematically related. They are two different ways of describing the same thing. I know this. I teach it every year, in ECON 1000. By the way, if I decided to start blogging about physics, what advice would you give me? (Apart from the obvious, like writing clearly.) pgl: yep. I know. When you replied to my reply about a year ago, I decided to check what you said, and found that you were right, unfortunately.
Toggle Commented Nov 28, 2014 on Links for 11-28-14 at Economist's View
1 reply
Gene: exactly. And the *how much* question is central to this post. God, the anti-intellectualism of some of these sneering artsies!
1 reply
Mike: please check out my new post, where I attempt to define a "fragile/robust" Nash equilibrium, based on the trembling hand idea. Tell me what you think.
1 reply
Nice data Matt. But 0% relevant to Simon's post, which is not about the population distribution.
Toggle Commented Oct 25, 2014 on Links for 10-25-14 at Economist's View
1 reply
Tim: adding my twopenceworth: http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/10/how-to-test-whether-the-lmi-lmci-is-a-good-indicator.html The Bank of Canada also constructs an "LMI" for the US. Here's what it looks like: http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/09/labour-market-slack-in-canada-and-the-us.html
1 reply
Yep. But how confident are we that the downward spike in 2008 was all a liquidity squeeze? If in 2008 you thought there was a non-zero probability of a big 1930's style drop in the price level, and you wanted to buy insurance against that risk, you would have shorted indexed bonds. A lot of people were very frightened back then, and scared of something much worse than the recession we actually had. I'm trying to remember my own subjective probability distribution for the future (say 5 year ahead) price level back in 2008. I remember it had a very big variance, and all of that extra variance was on the downside. It was a very skewed distribution, with the mean a long way below the mode. Maybe I would have put a 10% probability on the Fed *totally* failing to respond properly, and the price level falling by 30% or more.
1 reply
Three thoughts: 1. Your 4, 5, and 6 *might* be like your 2. 2. Would we say that the US economy goes into a "recession" every night and every weekend? I expect we could. But the symptoms are different from a normal recession. 3. "...if we ever shift from a pure fiat money system back to a system in which liquid cash requires costly resources to produce and can be produced (i.e., gold standard, silver standard, BitCoin mining)." Or if we ever have a workfare system run by the central bank.
1 reply
Thanks Brad. Successfully trolled. I will gather my thoughts, and respond later.
1 reply