More on eclecticism
“Experience has shown that Mother Nature is eclectic”
- Paul Samuelson
This recent blog on the merits of eclecticism in macroeconomics seems to have resonated. It follows a theme Dani Rodrik has advocate...
Paul Krugman is right – our models may be better than Larry’s instincts
The debate between Larry Summers, Brad DeLong and Paul Krugman over models and confidence is summarised excellently by Martin Sandbu. On one point, Krugman is absolutely right: there was never any reason to be ...
The case for eclecticism
Most macroeconomists have a mental model of how the economy works. I think there are five relevant mental frameworks:
Keynesian. This is the approach that most people are taught in high school and un...
Sitting on cathedral steps
Confusion in economics often resides in methodology - an area where economists are weak, as Simon Wren-Lewis points out. When we engage in economic analysis it is often unclear whether we are referring to speci...
Democracy in Europe
The ability to print money is a precondition of sovereignty. It is also a cornerstone of modern financial and economic systems. For all the talk of money being created by banks, in a panic it is clear that the ...
Negative interest rates don’t work
I have argued that economists should be very wary about advocating steeply negative nominal interest rates. This is a case of basing policy on models which assume what they need to prove. If we assume that cha...
Tobin & the end of banking
I'm writing about this subject with some trepidation. Many economists who have entered the fray have made fools of themselves; and many who triumphantly point out their errors usually go on to make some of thei...
The effects of negative interest rates. A brief reply to Miles Kimball
Miles Kimball has developed a very intriguing idea. He wants there to be an exchange rate between physical cash and electronic money (deposits) and a steeply negative interest rate on deposits to stimulate spen...
Cashless dreams … Or nightmares?
Martin Sandbu wittily suggests that advocates of competing contingency plans for central banks resemble Pythonesque political factions. He thinks a compromise could be a marriage made in heaven. But as a paid u...
Abolishing cash: a short reply to Martin Sandbu
Martin Sandbu has written a typically measured and thoughtful response to Andy Haldane's reflections on abolishing cash and setting negative interest rates.
On the substantive point - that Haldane has ommitt...