tag:blogger.com,1999:blog-21564190060323965712024-10-31T23:57:04.859-07:00Finance and Economics News, Headlines and IdeasAnonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.comBlogger1298125tag:blogger.com,1999:blog-2156419006032396571.post-31653641098713362222013-04-02T22:30:00.000-07:002013-04-03T13:35:49.743-07:00

I met a Mayan engineer on the plane last December. He was headed to Detroit to learn something about some mechanical engineering thing that I didn't understand. He handed me his business card, very politely, and made fun of me and all other Americans for predicting an apocalypse later that week. He told me that the Mexican economy was doing great, especially in the south of the country, and

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-58425129929933244442013-04-01T09:16:00.000-07:002013-04-03T13:35:03.820-07:00

I get asked about this one a lot. And it's also a source of controversy...on one hand you have some econ critics who say "Econ models wrongly assume that the economy is always in equilibrium," and on the other hand you have economists responding that "No, economics models are defined to always be in equilibrium." So I thought I'd try to clear things up...hopefully I don't just end up

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-61592875337735209432013-03-28T23:58:00.000-07:002013-04-03T13:37:20.468-07:00

David Andolfatto (of the St. Louis Fed and the blog MacroMania) points me to this interesting recent working paper by Braun, Korber, and Waki. The paper bears the somewhat unwieldy title of "Some unpleasant properties of log-linearized solutions when the nominal rate is zero." Basically, the authors of this paper take a New Keynesian model somewhat similar to the ones used by "Keynesian"

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-74998997477686561952013-03-27T14:34:00.000-07:002013-04-03T13:38:32.542-07:00

Mark Steyn strikes me as the kind of guy who would trick his buddy into picking a fight, then laugh as his buddy got punched in the groin. In fact, that's pretty much typical of the people whom we have come to call "neocons" - bombastically blathering about empire and glory and destiny and national will from the safety of their manicured subdivisions while someone else's kid watches his

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-77866559823366344182013-03-24T22:56:00.000-07:002013-04-03T12:18:10.184-07:00

...Nothing important to human beings in rich countries, that is.One of the first things I noticed when I started studying economics was that goods that can't be bought and sold are basically ignored. That might be fine for determining prices of stuff (especially if people have quasilinear utility), but when you have massively incomplete markets, the basic big results of first-year microeconomics

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-91693455503641274982013-03-19T01:25:00.000-07:002013-04-03T12:18:10.192-07:00

John Taylor, possibly more than any other economist who writes in the press, likes to simplify things for public consumption. Personally I think this is kind of a shame, since A) any WSJ reader who understands economic models will not understand what Taylor is talking about until they actually go read his research, and B) any WSJ reader who doesn't understand economic models probably already

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-16842369623170579502013-03-16T19:16:00.000-07:002013-04-03T13:39:59.275-07:00

Although my Atlantic column on wealth inequality got a lot of publicity, the comments were mostly negative. Almost all of them said one basic thing: "The poor don't have any money to save!" Now, first of all, this means that a lot of people just glossed over the column itself, and instead just guessed/assumed the message from the title and picture. These people assumed that my column

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-48411229284898403412013-03-12T09:56:00.000-07:002013-04-03T13:41:46.446-07:00

New column up at The Atlantic. The basic idea: We should try to make Americans' wealth distribution more equal. Excerpts: The math of wealth is actually pretty simple: It all boils down to four things: 1. How much you start with, 2. How much income you make, 3. How much of your income you save, and 4. How good of a rate of return you get on your savings... So one obvious thing we could do

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-42564766284845699392013-03-10T13:53:00.000-07:002013-04-03T13:44:12.040-07:00

Matt Yglesias has a post about the left and wages that I think makes a number of errors. Here's the intro: The left is rightly concerned about the real wages and incomes of ordinary working people. But the left fallaciously analogizes from a bargaining dynamic at a single firm to the entire economy. Well, I think many people do make errors of this type ("The government is like a household"

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-23750310986994035102013-03-09T18:47:00.000-08:002013-04-03T13:46:56.115-07:00

Last December, Shinzo Abe swept to power, promising to force the Bank of Japan to re-inflate the economy at any cost, boost stimulus spending, and (maybe) join the Trans-Pacific Partnership. By far the most striking of these pledges was the first one. A number of monetarist-leaning academics I talked to expressed great hope that "Abenomics" would revitalize the Japanese economy. This

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-64907333163942207302013-03-03T19:25:00.000-08:002013-04-03T13:45:52.180-07:00

On 2/26, Miles Kimball wrote a Quartz column called "What Paul Krugman got wrong about Italy's economy", in which he said this: In the last few days, while the US political debate centers on ways to deal with burgeoning debt, UK government debt has been downgraded and investors are demanding much higher yields on Italian debt in the wake of the Italian election results (paywall). As

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-76062773554774509992013-03-02T12:34:00.000-08:002013-04-03T12:18:10.338-07:00

Somehow I missed the first few salvos in this little police action, but I'm on it now! In this corner, we have Robert Waldmann, one of the pioneers of "noise trader" finance theory. In the other corner we have David Glasner of the FTC. Today's ingredient is wild mushrooms question is whether monetary policy works.(I have to say, it's pretty fun to see these two guys debate, since Waldmann is

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-32542502357062804892013-02-28T12:45:00.000-08:002013-04-03T12:18:10.436-07:00

Evan Soltas recently turned heads with a claim that the finance sector takes home half of all business profits in the United States. It turns out that this is an overestimate; in fact, the number is somewhere around 30%. But the basic story is correct. Finance, which accounts for only about 8% of GDP, reaps about a third of all profits.Here's a graph of finance's profit share, from The Big

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-84682834823665793502013-02-27T14:10:00.000-08:002013-04-03T12:18:10.542-07:00

Dean Baker easily could have gone into academia, or sold out and gone on to make big bucks consulting in the private sector. Instead he did neither, choosing to work in the less prestigious, less-highly-paid world of liberal Washington think tanks. The reason is that he cared about the American working class, and wanted to dedicate his life to fighting on their behalf. This is extremely

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-25563410644213712752013-02-25T07:30:00.000-08:002013-04-03T12:18:10.642-07:00

I don't intend to branch out into movie reviews, but Django Unchained struck me as a pretty politically important film, so I wanted to say a few words about it.I loved the movie. Not for the cartoonish violence (which was OK, nothing special) or for Tarantino's trademark witty banter (which was a bit subdued). I loved Django for the politics.First of all, I'm pretty sure that for all its elements

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-14372134853229586082013-02-22T12:57:00.000-08:002013-04-03T12:18:10.740-07:00

One time a guy accused me of "wanting to always be the smartest guy in the room". I replied: "Apparently you haven't seen the rooms I hang out in." As a matter of fact, I've always enjoyed being the dumbest guy in the room, because I'd rather learn from smart people than have to explain stuff to people.So I guess it's not surprising that I think we should offer intelligence-boosting technology to

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-13345006049341407352013-02-21T13:50:00.000-08:002013-04-03T12:18:10.837-07:00

New column up at the Atlantic, on whether or not capitalism requires infinite resource exploitation:When we bump up against our planet's resource limits, the story goes, capitalism goes bye-bye. But is it true? Maybe, but I have my doubts... The simple Econ 101 theories that are used to justify free markets don't even have growth in them! In Econ 101, capitalism works because people gain

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-75031090117314971222013-02-14T23:12:00.000-08:002013-04-03T12:18:10.934-07:00

Modern "business cycle" models used by mainstream macroeconomists are, for the post part, not actually models of cycles. When we think of a "cycle", most of us think of something like this:This is a wave, also known as a harmonic function. When things like this happen in nature - like the Earth going around the Sun, or a ball bouncing on a spring, or water undulating up and down - it comes from

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-51143843193020383372013-02-13T15:57:00.000-08:002013-04-03T12:18:11.042-07:00

In the blogosphere, David Graeber is known as a sort-of-leftish guy with a tendency to fight with other people on the left (he has called Slavoj Zizek an "intellectual comedian" and carried on a lengthy feud with Crooked Timber). But in the world at large, Graeber - an anthropologist by training - is known for writing Debt: The First 5,000 Years, a history of...well, the phenomenon of debt. He

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-83390308103212263162013-02-10T16:26:00.000-08:002013-04-03T12:18:11.149-07:00

Paul Krugman raises a puzzle:[C]orporations are taking a much bigger slice of total income — and are showing little inclination either to redistribute that slice back to investors or to invest it in new equipment, software, etc.. Instead, they’re accumulating piles of cash.Tyler Cowen thinks there is no puzzle:If there is a problem, it is because no one sees especially attractive investment

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-11748355448029697352013-02-09T12:56:00.000-08:002013-04-03T12:18:11.279-07:00

Paul Krugman rightly points out that Japan's growth during the period of 2000-2007 - roughly, the Junichiro Koizumi era - was a lot stronger than most people realize, and was in fact even stronger than growth in the U.S.:In the figure below I compared the ratio of Japanese to US GDP per capita (from Total Economy Database) with the ratio of Japanese to US GDP per adult aged 15-64:  

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-41414017907160247912013-02-08T18:55:00.000-08:002013-04-03T12:18:11.379-07:00

The "Efficient Markets Hypothesis" is a popular target of anger and derision among lay critics of the econ profession. How can financial markets be "efficient" when they just crashed and took our economy down with them? And when sensible people like Bob Shiller, Nouriel Roubini, Bill McBride, et al. were screaming their heads off about a housing bubble years before the pop?Of course I have some

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-18084714478552910532013-02-05T22:02:00.000-08:002013-04-03T12:18:11.478-07:00

I think that title really reaches out of the screen and grabs the reader, don't you? :-)Anyway. John Cochrane has been diligently working through New Keynesian macro models, and in this post he evaluates their ability to explain the long post-recession stagnation we've been experiencing, as well as their policy prescriptions. Some excerpts:The level of today's consumption depends on the whole

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-54286561762563978492013-02-03T09:03:00.000-08:002013-04-03T12:18:11.578-07:00

"You just got hustled for a wad of cash / Man whatcha gon do? Act a fool!"- LudacrisMichael Shedlock has a guide on "How to debate Paul Krugman". He endorses the approach of "Austrian" economist Hans Hermann-Hoppe, which is, in a nutshell, "Relentlessly pretend to be an ignorant simpleton." If you think I'm kidding, see what Shedlock and Hermann-Hoppe have to say:Economist Hans Hermann-Hoppe

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0tag:blogger.com,1999:blog-2156419006032396571.post-32662717237065722432013-01-31T21:00:00.000-08:002013-04-03T12:18:11.678-07:00

First, the good news. Here is an infographic about the U.S. contribution to global warming:U.S. total energy-related carbon emissions are down 13% since 2007. That's huge. Although the U.S. refused to sign the Kyoto Protocol, we managed about 70% of the emissions reductions mandated by that treaty (which is much better than most of the actual signatories!).Renewable energy now provides 12.1% of

Anonymoushttp://www.blogger.com/profile/11141562151744657199noreply@blogger.com0