Post Tagged with: "Economics"

Understanding what a neutral macro-economic policy looks like






This is going to be a quick follow-on to the last post on monetary policy as the only game in town. I feel like the obvious question that post doesn’t answer is this one: what other policy tools we should use? And I want to tee up that question with this post.

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Can Macron reform Europe?: A mental model for thinking about the economics






Having written the last piece on the intersection of Austrian economics and Post-Keynesian economics, I was asking myself the question: so what? Yes, the punch line of the piece was that both of these schools of thought lead to a world view marked by worry. But, as my friend Marcus, always asks me: how to make money from that. Here’s my answer – and I’m going to use Emmanuel Macron as the example.






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Underconsumption and the end of excess demand






Yesterday’s post on the failure of Japan’s monetary policy experiment drew some favourable commentary from a prominent macroeconomist that I want to run by you. The gist of his insight is that we have long been living in an age of an excess supply which is only now being made plain. Let me run the tenor of his comments by you and make some additional ones of my own.






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Rediscovering old economic models






The point of all this is that models don’t have to model everything, and even “wrong” models can be helpful if used in the right way. And narrative has its uses too.






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Monetary offset, fiscal determinism and asset bubbles: a Wynne Godley-style mental model for US economic forecasting (wonkish)

Monetary offset, fiscal determinism and asset bubbles: a Wynne Godley-style mental model for US economic forecasting (wonkish)






Yesterday was a big conference day in Washington, D.C., with the IMF and World Bank meeting and with the Brookings Institution holding an event featuring the Greek and German finance ministers. While I attended the Brookings event, the event I thought most interesting was the 24th Annual Hyman P. Minsky Conference at the National Press Club held by the Levy […]

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Central banks, inflation, inflation expectations, currency wars and the Japanese experiment

Central banks, inflation, inflation expectations, currency wars and the Japanese experiment






This is going to be a relatively short note focused on what is going on in Japan because of the news that Japan has ramped up its program of quantitative easing to new heights. Coming on the heels of the US Federal Reserve’s announcement that it would stop expanding its balance sheet with large scale asset purchases, the Bank of Japan’s announcement was music to the ears of Japanese equities investors. And shares in Japan promptly rose 4.8% on the news. The larger question, however, is whether QE is effective either at shaping future inflation or inflation expectations or at increasing nominal and real GDP. The evidence is equivocal. And so Japan presents a unique opportunity to see the limits of monetary policy tested.






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Does The Secular Stagnation Theory Have Any Sort of Validity?

Does The Secular Stagnation Theory Have Any Sort of Validity?






While there is no definitive answer at this point to the question whether or not what we are seeing is a creeping process of secular stagnation which will gradually spread from one economy to another as the respective working age populations start to contract, there is strong prima facie evidence that the theory is worth examining and that the hypothesis should continue to be tested.






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Interview: On The Global Economy and Economics

Interview: On The Global Economy and Economics






By Michael Pettis Doug, Pancoast, an American entrepreneur living in Shanghai, asked to interview me for his blog, and I agreed to do so. I think it was meant to be a brief interview, but I began to respond on a Saturday evening, while waiting for the performance at my club to begin (my office is at my CD label, […]

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How economics deals with an overindebted private sector

How economics deals with an overindebted private sector






Happy post-World Cup to you all. I missed my Friday catch-all post because I was out sick. So I am going to play catch-up today with a few thoughts on various topics. The BIS Let’s start with the BIS. In general, I defend the BIS view because the BIS is rightly focused on the dangers of over-indebtedness. Gavyn Davies has […]

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How economics has failed us

How economics has failed us






The title of this piece is a bit provocative but what follows is not intended to be a hit piece on the field of economics, rather I am going to use two recent articles on economics’ failure as a jumping off point for thinking about this particular economic cycle and what macro analysis can offer in navigating it. The overall […]

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Why a savings glut does not increase savings

Why a savings glut does not increase savings






By Michael Pettis Debate about the global savings glut hypothesis is mired in confusion, a fundamental one of which is the seemingly obvious but false claim that a global savings glut must lead to higher global savings. Here, for example, is a recent piece by one of my favorite economists, Barry Eichengreen: There is only one problem: the data show […]

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Endogenous Money in the Media






Last night, we aired two segments on endogenous money on Boom Bust, the TV show I am now producing on RT, the Russian broadcaster. Frances Coppola and Cullen Roche do a good job of explaining the details. Take a look






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