The fair division of a windfall
An interesting debate is occurring over the ethics of granting the central bank power to make cash transfers to households. This is not an academic debate. I think one of the main stumbling blocks to this polic...
Myopia, ‘mathiness’, China, & Corbyn
A lot of intriguing debates have occurred in the last month or so that merit individual blogs, but markets have been preoccupying me, so I have been unable to write at length. In some ways, these four subjects ...
A simple refutation of raising the inflation target
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
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...
Does the central bank’s balance sheet matter?
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...
A short reply to Tony Yates (on helicopters)
Tony Yates is a superb economist and has a great blog. He also tends to be relentlessly logical. But his argument against helicopter drops is a rare exception. He makes three points:
“I’m against helicopter dr...
The “Pigou effect” is smarter than you think, and more relevant than ever
I was taught to dismiss the Pigou effect. Arthur Cecil Pigou (or “Pig” if you believe spell-check) was a great Cambridge economic theorist, known to most of us as the object of Keynes’s repeated ridicule in the...
Eurozone QE clears the way for tax cuts
In a very clear analysis, Paul de Grauwe shows how QE could work in the Eurozone. National central banks, or the ECB, would buy government bonds in proportion to member states’ share of ECB capital. National go...
We are nowhere near the zero bound
We need more cash, not less.
Many economists just assume that central banks have hit “the zero bound” on interest rates and that conventional policy is thereby exhausted. Take Ken Rogoff’s bizarre proposal as a...
Foreign Affairs: print less, transfer more
In Foreign Affairs, Mark Blyth and I map out a plan to end recessions and broaden equity ownership - without raising taxes. Read the full article here....