Eric Lonergan, Author at Philosophy of Money

A simple refutation of raising the inflation target

10th August 2015

Premises: Inflation falls if there is significant spare capacity. If the central bank can consistently hit its inflation target there is no spare capacity. If there is no spare capacity, there is no p...

A brief reply to Bank Underground

Eric Lonergan

8th August 2015

Monetary Policy

3

Fergus Cumming at the Bank of England has written this blog on the subject of helicopter drops. It is encouraging that the Bank is discussing the matter, but unfortunately the references are too narrow and t...

Ricardian equivalence: another reason why fiscal policy works

Eric Lonergan

17th June 2015

Austerity, Theory & Other Problems

3

Sometimes the obvious is hard to perceive. Debate about "Ricardian equivalence" may be missing the obvious: forward-looking, ‘rational’ households should expect fiscal policy to work, and their future incomes t...

Reply to Brad (Part II) – Pigou, Haberler, Friedman v Hicks, Hansen, Krugman

Eric Lonergan

12th June 2015

Economic History

3

I agree with Brad DeLong that Paul Krugman has correctly diagnosed most of the big global economic calls since the mid-1990s. My beef is with his policy prescription. The issue at stake is how to get out of a ...

Keynes and Friedman are always right: a reply to DeLong & Krugman

Eric Lonergan

7th June 2015

Economic History

5

Brad DeLong has an interesting rule of thumb: if you want to understand the economy since the mid-1990s, Paul Krugman is always right. And if you ever think he's wrong ... Don't. I disagree, and a detour into ...

Taxis, coffee, and another broken equation

Eric Lonergan

3rd June 2015

Theory & Other Problems

4

Standard macroeconomic models are premised on the assumption that recessions occur because of “nominal rigidities” in wages and prices. I’ve never found this convincing. Economists observe that quantities move...

Does the central bank’s balance sheet matter?

Eric Lonergan

25th May 2015

Definitions of Money, Monetary Policy, Theory & Other Problems

A growing number of economists are advocating granting central banks the power to make payments to households. Brad DeLong puts it in historical context, bemoaning the failure of the “social credit” politicians...

The latest debate over UK fiscal policy is a distraction

Eric Lonergan

23rd May 2015

Austerity

Debate on post-crisis fiscal policy in the UK seems to have taken an odd turn, in no small part thanks to Niall Ferguson’s successful attempts to wind-up the British economics community. Ferguson’s approach...

Austerity, inflation, and a fictional bond panic

Eric Lonergan

5th May 2015

Austerity

3

In response to recent posts from Simon Wren-Lewis, Paul Krugman and myself, Tony Yates has expanded on his defence of the principle of tightening fiscal policy in the aftermath of the financial crisis. He prov...

Was austerity an insurance policy?

Eric Lonergan

1st May 2015

Austerity

2

Some very reasonable voices have argued that fiscal tightening post-financial crisis was a prudent form of insurance. According to this line of reasoning, although financial markets were treating the bonds of c...

A simple refutation of raising the inflation target

A brief reply to Bank Underground

Ricardian equivalence: another reason why fiscal policy works

Reply to Brad (Part II) – Pigou, Haberler, Friedman v Hicks, Hansen, Krugman

Keynes and Friedman are always right: a reply to DeLong & Krugman

Taxis, coffee, and another broken equation

Does the central bank’s balance sheet matter?

The latest debate over UK fiscal policy is a distraction

Austerity, inflation, and a fictional bond panic

Was austerity an insurance policy?

Reviews of Eric’s book

CNBC: market sell-off is ‘noise’

Monetary policy & babysitting: why rates are so low, and ‘what’s next?’

Author Eric Lonergan