Maybe inflation isn’t the right variable (example #329)
For years, I’ve been trying to convince the profession that inflation is not the right variable, it’s NGDP growth that matters. One example I frequently cite is the prediction of NK models that...
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Demystifying NeoFisherism
James Bullard has a new paper out discussing the NeoFisherian perspective on interest rates. According to the NeoFisherian view, holding interest rates at a low level for a long period of time will...
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How did we end up here?
I’ve finally had a chance to read Paul Romer’s critique of macroeconomics, and it’s every bit as interesting as you might expect. I’m going to focus on a single issue, which in my view lies at the...
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1946
Over at Econlog I did a post discussing the austerity of 1946. The Federal deficit swung from over 20% of GDP during fiscal 1945 (mid-1944 to mid-1945) to an outright surplus in fiscal 1947. Policy...
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Why macroeconomists need to study history
One of the ways that macro differs from micro is that macro is essentially a branch of history. Micro is not. And yet today’s macroeconomists often have not studied monetary history. Marcus Nunes...
View ArticleKeynesianism as religion
If there is any intellectual framework that should have been discredited over the past decade it is old-style Keynesianism. Unfortunately, just the opposite has happened. Marcus Nunes directed me to...
View ArticleKeynes was wrong; animal spirits do not drive growth
Here is Neil Irwin: After Donald J. Trump won the presidential election, Americans’ optimism about the economic future soared. But midway through the year, that optimism has not translated into...
View ArticleCowen and Smith on monopoly and stimulus
In a recent Bloomberg debate, there was an interesting exchange. First, Tyler Cowen: But Noah, I have a question for you. You’ve written several columns about how the American economy is becoming more...
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Natural interest rate bleg
I suppose I should know what the natural rate of interest is, given that I’m a monetary economist. But I see the term used in two radically different ways, and am not sure which version is correct: 1....
View ArticleWe need to unify monetary theory and monetary policy
Before today’s post, a few quick comments. I have a piece on Trump’s “deregulation” policies at MarketWatch. I have a Ted talk on public opinion at Econlog. It’s clear to me that there is something...
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