This is AndrewLainton's Typepad Profile.
Join Typepad and start following AndrewLainton's activity
AndrewLainton
Recent Activity
Great post but small inconsistency
'The total market value of those shares (the market cap) is equal to and determined by the expected present value of your company's profits.'
No its the NPV of profits + NPV of liquidity premium - as you state further down
Which unifies with williamson
And helps explain why not conform to Mog - Miller - which is a result that only holds in equilibrium anyway
John Cochrane On Neo-Fisherianism, again
First I am going to give you the intuition behind the model in John Cochrane's new paper. It's a very good paper, though I confess I've only skimmed it, because it's very long, and I don't understand all the math. Then I'm going to explain what I think is wrong with it. Then I'm going to explain...
Graziani triangle - type in more than three letters in my citation manager
Graziani, Augusto (1989), Theory of the Monetary Circuit, ISBN 978-0-902169-39-5
My Cunning Plan to reform New Keynesian Macro
Brad DeLong calls it my "self-imposed Sisyphean task". He's probably right. But it seems worth a try, as long as there's a small chance he's wrong. I have a Cunning Plan. Like it or not (and there is much to like as well as dislike), New Keynesian macro has become the main accepted appr...
Good attempt but
1) Still relies on loanable funds
2) Value of money is indeterminate
3) Good part is the garsellian monetary triangle
Your two traders, 1 banker model is very grasellian and that I think is the solution. Replace the central bank with a private bank, and the agent having a liquidity preference and you find the model is indeterminate as there is no means of determining the stock of money.
Imagine however that there is a growth rate x, and there is a central bank. In order to satisfy liquidity preferences and achieve a goal or price stability the public sector must have a net deficit with the private sector of x.
Add in a fiscal theory of the price level type equation for government debt and you have a determinate system that holds in the most minimally simplistic investment-savings model without a dud hicks IS curve.
I would interpret that equation as the level of net monetary addition necessary to maintain price stability not a budget constraint (a circuitist approach) as in a sovereign currency there is no compunction to government bankruptcy - i.e. it is a price constraint not a budget constraint.
My Cunning Plan to reform New Keynesian Macro
Brad DeLong calls it my "self-imposed Sisyphean task". He's probably right. But it seems worth a try, as long as there's a small chance he's wrong. I have a Cunning Plan. Like it or not (and there is much to like as well as dislike), New Keynesian macro has become the main accepted appr...
AndrewLainton is now following The Typepad Team
Nov 7, 2016
Subscribe to AndrewLainton’s Recent Activity