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A Quick Note On Michael Emmett Brady’s Paper On Keynes And Probability

23 hours ago

Posted on 28 May 2020
by Philip Pilkington

Article of the Week from Fixing the Economists “Ask and it will be given to you; seek and you will find; knock and the door will be opened to you." – Matthew 7:7Michael Emmett Brady’s paper Keynes, Mathematics and Probability: A Reappraisal is a bizarre piece of work. In it he reads things into Keynes work on economics in a manner that is not dissimilar to someone reading another person’s fortune into tea leaves.Please share this article – Go to very top of page, right hand side, for social media buttons.In the paper Brady claims that in Keynes’ Treatise on Probability the author stopped trying to make ‘point estimates’ of probabilities – that is, estimates that crunch out a single number – and instead moved toward trying to make

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Introduction To Monetary Post Keynesian Economics

1 day ago

Posted on 27 May 2020

Written by Steve Keen, Patreon.com/Steve Keen

This is a talk I’ve prepared for the University of Basel, which has established an online plural economics lecture series as part of the official curriculum–a move for which I congratulate the University.

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I give a very brief overview of the content and history of Post Keynesian economics, and then focus on Hyman Minsky’s Financial Instability Hypothesis, and my work on both modelling Minsky and explaining the role of credit in aggregate demand and income. This includes a very brief introduction to complex systems and system dynamics, using the Open Source software I designed called Minsky.

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Is The Fed Walking Into A Trap?

4 days ago

Posted on 23 May 2020
by Lance Roberts, Clarity Financial

Currently, the Fed is injecting liquidity into the markets and economy at a record pace. While liquidity does have positive short-term benefits, is the Fed walking into a trap?Please share this article – Go to very top of page, right hand side, for social media buttons.The UnseenOver the last decade, the Federal Reserve, and Central Banks globally, have engaged in never-ending “emergency measures" to support asset markets. While the stated goal was that such actions were to foster full employment and price stability, there has been little evidence of success.The chart below shows the expansion of the Fed’s balance sheet and its effective “return on investment" on various aspects of the economy. No matter how you analyze it,

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Rewinding The Tape

5 days ago

Posted on 24 May 2020
by John Mauldin, Thoughts from the Frontline

We finished the Virtual Strategic Investment Conference yesterday. I can honestly say it was simply the best conference I have ever attended or been privileged to host.Please share this article – Go to very top of page, right hand side, for social media buttons.The ability to bring together so many exciting speakers, something schedules would not have allowed if we were holding a physical conference, offered a constant stream of thought-provoking, investment-enhancing, and useful information.I shared some highlights in last week’s article, will tell you more today, and probably yet more next week. But you really need to experience it yourself, and you still can with our Virtual Pass package that includes video,

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The Lesser G-7

7 days ago

Posted on 21 May 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

Fading into Economic AbsurdityThe G7 is a rather exclusive club of the 7 ‘largest’ and, according to their own aspirations, most important – economically and geopolitically – economies. Except, of course, it isn’t. The latest IMF data (through 2019) and forecasts (for 2020-2021) published last month show just how bizarre the geopolitical influencer game got over the recent years and just how more bizarre it is likely to get over the next two.Please share this article – Go to very top of page, right hand side, for social media buttons.Below are the actual ranks of the countries based on their GDP, taking into account exchange rates and price levels differences (the PPP adjustment). And before you jump at

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Interest Rates And Animal Spirits: A Response To JW Mason

8 days ago

Posted on 21 May 2020
by Philip Pilkington

JW Mason has an interesting post on the interest rate over at his Slackwire blog. In it he basically tries to resuscitate Keynes’ theory of liquidity preference as that which determines the interest rate on various assets. I think that he does rather a good job given that this is his goal but from the moment I looked into this debate over a year ago I was always bothered by what was going on.Please share this article – Go to very top of page, right hand side, for social media buttons.First let us start with the conclusion that Mason comes to when considering the theory of the interest rate that Keynes lays out in the General Theory,If we take a more realistic view of credit markets, we come to the same conclusion: the yield on a credit

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Reflection Week

12 days ago

Posted on 17 May 2020
by John Mauldin, Thoughts from the Frontline

I knew this article’s topic months ago. It was going to be a review of the Strategic Investment Conference, which would have just concluded fabulously in sunny Scottsdale.Please share this article – Go to very top of page, right hand side, for social media buttons.Well, something intervened. Coronavirus precautions kept us from having an in-person conference. No one was more disappointed than me. I often say SIC is the highlight of my year, and I’m not kidding. Being around so many brilliant minds, soaking up their knowledge, and all the while meeting and talking with so many loyal readers and close friends – it’s just an amazing experience.Yet I have to say, the Virtual SIC we are now halfway through is amazing,

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Bertrand Russell’s Teapot

15 days ago

Posted on 14 May 2020

by Philip Pilkington

Misreading of George Berkeley’s Philosophy

I recently picked up Bertrand Russell’s History of Western Philosophy to have a look at the argument he makes against the philosophy of George Berkeley. Frankly, I have never liked Russell. He is a clear writer – and a convincing one – but a poor scholar. He also has a tendency to read his own biases into the works of others as being ‘mistakes’.

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Most of what Russell does is that he assumes that his own Rationalist worldview is the correct one and then shows how other worldviews are ‘incorrect’ by the standards of his own worldview. I do not want to be misread here because I am the first person to

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‘Savings Mirage’ Won’t Save The Economy

15 days ago

Posted on 13 May 2020

by Lance Roberts, Clarity Financial

The fiscal and monetary responses to the "coronavirus" created a surge in savings. While many hope those savings will go back to work, the "savings mirage" won’t save the economy.

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In recent weeks, there has been a good bit of chatter about the surge in the "savings rate." The rate has now jumped to the highest levels seen in the last couple of decades, suggesting the consumer is now "well-positioned" for a "consumption comeback."

As Bank of America’s Michael Hartnett suggests, the consumer has the "ability" to finance the recovery.

The hope is that these "cash hoards" will eventually begin to flow back into the economy

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Five Viral Lessons

19 days ago

Posted on 10 May 2020
by John Mauldin, Thoughts from the Frontline

We live in truly historic times. “There are decades when nothing happens, and weeks when decades happen," says a quote usually attributed to Vladimir Lenin. It certainly fits now.For thousands of years, people who lived through what we call “history" didn’t realize it. We are the exceptions. We’re seeing history and we know it. The Vietnam War was certainly historic, but the coronavirus killed more Americans in the last two months than died in that long conflict. The Great Depression was historic but by some indicators we are well on the way to matching it. The Manhattan Project and the Apollo missions were historic, but right now even more massive, world-changing technology and biotechnology are being hastily

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Why Jobless Claims Are Still So High

19 days ago

Posted on 09 May 2020
by UPFINA

Weekend Reading From UPFINAWe received some criticism for saying initial jobless claims had peaked in late March. Now that’s virtually assured as they fell for the 5th week in a row. In the week of May 2nd, initial claims fell from 3.846 million to 3.169 million. This is all about the situation getting worse at a lower rate. The labor market is still worsening, but it’s not worsening at as rapid a rate as it was in late March.Please share this article – Go to very top of page, right hand side, for social media buttons.Furthermore, as we will get to later, many of these claims are from the backlog, meaning these aren’t newly unemployed people. As you can see from the chart below, initial claims are expected to fall to 2.48 million in the next report.

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Revolutions In Subjectivity

22 days ago

Posted on 07 May 2020
by Philip Pilkington

Comments on Feyerabend’s ‘Against Method’, Part 2In my previous commentary on Feyerabend’s book Against Method I criticised him for being incoherent in his understanding of the relationship between the philosophy of science that he is actually expounding and his own philosophy which he thinks to be materialist but which is quite evidently not. In this commentary I seek to clarify what is actually taking place in the conceptual revolutions that Feyerabend documents in the book. He argues that these are revolutions in ‘language’ and ‘concepts’ but I think when they are examined closely it is obvious that they are rather revolutions in subjectivity.Please share this article – Go to very top of page, right hand side, for social media

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Irony: Healthcare Sector Hurts The Economy

23 days ago

Posted on 06 May 2020
by UPFINA

Article of the Week from UPFINAMillennials have less wealth than previous generations did at the same age and now they are getting hit with the deepest decline in economic growth and the biggest spike in unemployment since the Great Depression. As you can see from the chart below, net household wealth per generation member 21 years or older in 2019 dollars was the lowest for millennials. Millennials had 30% less wealth than generation X did at the same age.Please share this article – Go to very top of page, right hand side, for social media buttons.Source: Twitter @graykimbroughWe don’t have data on this recession’s impact on millennials, but we do know the last recession left a permanent mark on career earnings. Young people’s net worth comes from

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Latest COVID-19 Charts

23 days ago

Posted on 05 May 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

The global comparatives on incidence rates and death rates show lack of convincing decline in the rate of detected new cases and deaths worldwide. In the last three days, global case numbers posted another ‘local peak’ reading of 93.328 cases on May 2, which marks a fifth ‘local peak’ in the overall time series.Please share this article – Go to very top of page, right hand side, for social media buttons. ‘Local trough’ of 65,944 cases on April 28 – much touted in the media as the evidence of the pandemic moderating – has now been followed by four consecutive days of increases through May 2, and the usual declines in cases on May 3 and 4th. May 4th counts were 78,657, which ranks 18th most severe increase in

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The Figure-It-Out Economy

26 days ago

Posted on 03 May 2020
by John Mauldin, Thoughts from the Frontline

Market sentiment reflects human sentiment, which lately has been quite negative – understandably so, given the great uncertainty surrounding the coronavirus pandemic. A month ago, we didn’t know where all this was going but it was potentially serious.Please share this article – Go to very top of page, right hand side, for social media buttons.I can almost begin to sense sentiment changing. New drug therapies are being announced and dozens of vaccines are in development. There is a high probability one or more will work by the end of the year. Deployment will be difficult, but doable. This change in sentiment, combined with generous fiscal support and liquidity injections, gives investors more confidence, so we see

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The Coming Battle For The COVID-19 Narrative

27 days ago

Posted on 02 May 2020

from Voxeu.org

— this post authored by Samuel Bowles and Wendy Carlin

Like the Great Depression and WWII, the COVID-19 pandemic (along with climate change) will alter how we think about the economy and public policy, not only in seminars and policy think tanks, but also in the everyday vernacular by which people talk about their livelihoods and futures. It will likely prompt a leftward shift on the government-versus-markets axis. But more important, it may overturn that anachronistic one-dimensional menu of policy alternatives by including approaches drawing on social values going beyond compliance and material gain to include ethical motivations of solidarity and duty that underpin community.

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Bottom Half Of Households: Ten Years To Recover

27 days ago

Posted on 30 April 2020
by UPFINA

Article of the Week from UPFINAHeading into this recession, consumers were in relatively good shape on a historical basis. They were in dramatically better shape than they were at the end of the last expansion because that was the peak of the long term debt cycle. It’s tough to have as much leverage as there was at the peak of the housing bubble because mortgage debt is by far the biggest liability on the consumer’s balance sheet.Please share this article – Go to very top of page, right hand side, for social media buttons.The consumer naturally looks good when there are low interest rates along with the lowest unemployment rate in decades. The household debt to GDP ratio in Q4 2019 was 76% which was near the cycle trough – the lowest rate in at

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Real Materialism Versus Marxian Materialism

29 days ago

Posted on 30 April 2020

by Philip Pilkington

Comments on Feyerabend’s ‘Against Method’, Part 1

I am currently rereading Paul Feyerabend’s excellent book Against Method. It’s a very good book and I find myself in agreement with an awful lot that is in it. I have noted, however, that the argument suffers in some places because of the author’s lack of concern about rigour.

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In fact this is a constant problem in the book and it stems from the manner in which the author thinks. Feyerabend insists that empiricism as commonly understood is wrong. In a watered-down version of empiricism we must test theories against facts and if the facts refute them then we must throw away the theory. In

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Viral Thoughts

April 26, 2020

Posted on 26 April 2020

by John Mauldin, Thoughts from the Frontline

We are looking at a world with parameters bounded by pure imagination; where we go from here is anyone’s guess. – Will Thomson and Chip Russell, Massif Capital

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Today’s letter will be another hop-around review of the crisis landscape. I’ll touch on several topics instead of going deep into a single theme. So much is going on, it’s really hard to know where to start. There will be something to annoy everybody. So, let’s just dive in.

Actually, let’s start with some good news. I talked with Dr. Joseph Kim of Inovio yesterday. They are beginning the initial safety/immune response phase human trials of a vaccine

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The Theory Of The Monetary Circuit: A Critique

April 23, 2020

Posted on 23 April 2020
by Philip Pilkington

Article of the Week from Fixing the EconomistsIn a series of comments on my previous post involving myself, Neil Wilson and Oliver it became clear quite quickly how closely my asset-pricing framework is tied up with the Post-Keynesian theory of endogenous money. Oliver suggested that I look into the Theory of Monetary Emissions (TME) – a forerunner of the modern ‘Circuitist school’ of monetary theory.Please share this article – Go to very top of page, right hand side, for social media buttons.In this post I consider how and why my approach differs from the Circuitist theory through a reading of Sergio Rossi’s excellent paper The Theory of Monetary Emissions which can be found in A Handbook of Alternative Monetary Economics.I will not

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Two Scariest Charts In Economic History

April 20, 2020

Posted on 20 April 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

I have been posting quite a bit on U.S. unemployment and jobs destruction numbers coming from the COVID-19 pandemic. So here are two charts to watch into the future, and I will be updating these throughout the crisis here.Please share this article – Go to very top of page, right hand side, for social media buttons.The first chart plots evolution of non-farm payrolls index for each official recession. I used as the index base average payroll numbers for 6 months prior to the first month of the recession. I then compute and plot the index from month 1 of the recession through the last month prior to the next recession.The second chart is the average duration of unemployment claims or average weeks unemployed.

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Are Coronavirus Death Statistics Exaggerated? Worse Than Seasonal Flu Or Not?

April 20, 2020

Posted on 20 April 2020
by Nadeem Walayat

This is part 1 of 2 that updates the current trend trajectories for the coronavirus mega-trend, where whilst the pandemic itself may not last more than a year nevertheless the magnitude of which is likely to impact many aspects of our lives for decades to come. Where the purpose of this analysis is to ensure that we are not all getting carried away by media headlines that could be over exaggerating covid-19 that has resulted in unprecedented government measures.Please share this article – Go to very top of page, right hand side, for social media buttons.Especially as a significant percentage of people, usually those yet to experience the first hand consequences of the Coronavirus, see it largely in terms of being a corona hoax, fake news, a

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WTO: Projections For World Trade In 2020

April 19, 2020

Posted on 19 April 2020
by Timothy Taylor, Conversable Economist

For those who see international trade as a destructive force, the dismal economic news of 2020 comes with as silver lining: as the World Trade Organization puts it, "Trade set to plunge as COVID-19 pandemic upends global economy" (April 8, 2020). The WTO predicts:"World merchandise trade is set to plummet by between 13 and 32% in 2020 due to the COVID-19 pandemic."Please share this article – Go to very top of page, right hand side, for social media buttons.The predicted slowdown in trade for 2020 is certainly no surprise, but the WTO report provided some context of patterns of trade since 2000 that seemed worth passing along. One is that global trade slowed down after about 2008. I suspect that much of this change

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Repricing The World

April 19, 2020

Posted on 19 April 2020
by John Mauldin, Thoughts from the Frontline

The viral fog is starting to thin. US coronavirus case growth appears to be slowing, albeit at a tragically high level. Governments and businesses are thinking about the next stage.Please share this article – Go to very top of page, right hand side, for social media buttons.On the other hand, fog tends to return when the weather is right. Might this virus come back, as seems to be happening in Japan and Singapore? We shouldn’t relax just yet.Nate Silver’s FiveThirtyEight site published an information-filled comic about the wide gaps in various “scientific" virus models. Just as in investing and climate change, accurate models are difficult. Just a sample:Source: FiveThirtyEightWe know everything has changed, but

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Laying A Solid Foundation For My Theory Of Asset-Pricing

April 16, 2020

Posted on 16 April 2020
by Philip Pilkington

In the comments my previous post concerning my theory of asset prices – comments that have, I should add, been extremely productive so far – Nick Edmonds raised some questions as to whether I was dealing with stocks and flows. After a bit of back and forth I realised that what we were dealing with touched on some of the fundamental problems that I noticed with my theory just prior to publication.Please share this article – Go to very top of page, right hand side, for social media buttons.Therefore, in this post I am going to lay out in very clear terms exactly what we are dealing with and then briefly consider what implications this slightly altered approach has for one of my key conclusions – namely, what I have termed ‘the

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What Is The Benefit To Banks From Money Creation?

April 16, 2020

Posted on 16 April 2020
Written by Econintersect

— this post authored by Nick Edmonds, Reflections on Monetary EconomicsIn a response to a recent post by Brian Romanchuk, somebody made the following comment:"If private banks are ….. allowed to create and lend out their own money, they can undercut the ….. free market rate of interest, and for the simple reason that printing money is cheaper than having to borrow it or earn it."Please share this article – Go to very top of page, right hand side, for social media buttons.This seems to suggest a kind of model in which banks choose whether to finance themselves with someone else’s money that they have to pay to borrow, or money they create for themselves for free. I think the problem is that this confuses two distinct ideas: that

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Re-Opening America: A Long Road Ahead

April 15, 2020

Posted on 15 April 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

In our Financial Systems class, yesterday, we were discussing the potential trajectories for ‘exit’ from COVID19 restriction and easing of economic constraints. Handily, yesterday, Morgan Stanley published this analytical timeline of the pandemic evolution:Please share this article – Go to very top of page, right hand side, for social media buttons.Their analysis is based on the following assumed timings:They expect U.S. coastal regions to peak in the next 3-5 days (so April 15-17),The rest of the U.S. will lag these by "around 3 weeks", leading to a "second peak" that promises to be not as severe as the first peak.The MS are expecting the second peak to result in the US cases peaking at x4 China and x2

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The Enigma Of Business Cycles – Wicksell On Inventory Fluctuations

April 14, 2020

Posted on 13 April 2020
from Dirk Ehnts, Econoblog101

The last ten years have brought Knut Wicksell, a Swedish economist born in the 19th century, closer to the spotlight. His "Interest and Prices" (1898) should be understood as the birth of a new idea of how to explain monetary systems. (I have written about this elsewhere.)Please share this article – Go to very top of page, right hand side, for social media buttons.While some still pretend that Wicksell was a neoclassical economist, this has never been true. Just like Keynes worked in the paradigm of his time, so did Wicksell. And he found interesting spins to these old theories, like this:The objection that a further reduction in rates of interest cannot be to the advantage of the banks may possibly in itself be perfectly

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The Use And Abuse Of MMT

April 13, 2020

Posted on 13 April 2020

by Michael Hudson, with Dirk Bezemer, Steve Keen and T.Sabri Oncu

Summary

After being attacked by monetarists and others for many decades, MMT and the idea that running government budget deficit is stabilizing instead of destabilizing are suddenly gaining applause from the parts of the political spectrum that long opposed MMT: the banking and financial sector, especially the Republicans. But what is applauded is in many ways something quite different than the leading MMT advocates have long supported.

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Modern Monetary Theory (MMT) was developed to explain the logic of running government budget deficits to increase demand in the economy’s consumption and

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Bending The Inflation Curve

April 12, 2020

Posted on 12 April 2020
by John Mauldin, Thoughts from the Frontline

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth.". . – – Milton Friedman, The Counter-Revolution in Monetary Theory (1970)Please share this article – Go to very top of page, right hand side, for social media buttons.“Well, maybe…" . . – – John Mauldin, with more than a little hubris, 2020I am widely known as the “muddle through" guy. I describe problems then explain how we will get through them, slowly but surely.That analogy isn’t appropriate for

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