Monthly Archives: December 2013

Toward a New Macroeconomics, Part Two

The creation/destruction matrix tells us about employment. What about inflation? In my view, there is no reliable Phillips Curve. Also, the behavior of velocity means that the monetary authority cannot precisely control inflation (or nominal GDP). Instead, there are three … Continue reading

Posted in Monetary Economics, PSST and Macro | 4 Comments

Toward a New Macroeconomics, Part One

This is a concise summary of what I currently believe. Low Creation High Creation Low Destruction Corporatist Stagnation Schumpeterian Boom High Destruction Minsky Recession Rising Dynamism There is high creation when new businesses are launching and growing at a high … Continue reading

Posted in PSST and Macro | 3 Comments

David Andolfatto on Asymmetry

He writes, the labor market is a market for productive relationships. It takes time to build up relationship capital. It takes no time at all to destroy relationship capital. Pointer from Mark Thoma. Note that this should make firms hesitant … Continue reading

Posted in Mark Thoma is Indispensable, PSST and Macro | 4 Comments

Noah Smith’s Crazy Utopian Idea

He writes, I want to move back toward a society where the hard work of an unskilled laborer is considered worthwhile in social interactions, regardless of how many dollars it brings home. I want to move back toward a society … Continue reading

Posted in Mark Thoma is Indispensable, Politics | 27 Comments

Fun Re-reading

For the macro book that I am working on, I wanted to refresh my memory for how the financial crisis played out. I went back to blog posts that I wrote in 2007. You can find them here. Scroll down … Continue reading

Posted in Financial Crisis of 2008, financial markets, links to my essays | Comments Off

Placebo vs. Knee Surgery

From the WSJ: But researchers in Finland who studied two sets of patients—one that received the surgery, and another that was led to believe that it had—observed no significant differences in improvement between the groups after one year. This is … Continue reading

Posted in Economics of Health Care | 4 Comments

Neil Wallace on Money

He says, “Money is memory” is a better idea. It leads you to think about various kinds of payment instruments in terms of the kind of informational structure that supports them. The money that is the best current counterpart to … Continue reading

Posted in Monetary Economics, Tyler Cowen is my Favorite Blogger | Comments Off

What Kind of Corporatism?

A commenter on this post writes, corporatism is the only game in town ( The question then is what KIND of corporatism? Libertarians who say that regulation = corporatism and who shrink back from any effort to regulate end up … Continue reading

Posted in Libertarian Thought, public choice | 4 Comments

Money and Inflation

Owen F. Humpage and Margaret Jacobson write, Over the short run—a year or two—excess-money growth explains very little of the changes in the GDP deflator. If excess-money growth explained all of the annual price changes, the dots in the scatter … Continue reading

Posted in Mark Thoma is Indispensable, Monetary Economics | 2 Comments

Creative Destruction in the Cultural Eye

I saw the Ben Stiller “remake” of “The Secret Life of Walter Mitty.” I rarely watch movies, and I do not like many of those that I do see. Had the main character not been named Walter Mitty, no one … Continue reading

Posted in markets, Politics | 4 Comments