Thursday , December 14 2017
Home / Global Economic Intersection

Global Economic Intersection

The Great Unwinding: Some Thoughts on the Incoherence of Mainstream Economics

by Philip Pilkington A recent post by Lord Keynes inspired me to write up some very general thoughts on the state of mainstream economics. Today, I believe, mainstream economics is completely incoherent. What do I mean by that? Well, basically if you are in the mainstream you can pretty much believe in whatever you want these days. Follow up: Please share this article - Go to very top of page, right hand side, for social media buttons. Mainstream economics today can be made to say...

Read More »

Automatic Job Storm Coming

by John Mauldin, Thoughts from the Frontline Almost every weekday, some arm of the US government issues some sort of economic statistic. News media and financial analysts review and report it. Then 99.9% of the adult population, and probably 90% of the financial industry, forget all about it. And they’re probably right to do so. Follow up: Please share this article - Go to very top of page, right hand side, for social media buttons. The monthly jobs report isn’t like that. Yes, any...

Read More »

Against Marginalist Pricing Theory: US Consumer Prices and Capacity Utilisation

by Philip Pilkington Marginalist economic theory tells us that when there is unemployment of capital resources prices should fall. Some marginalists like the New Keynesians and the neo-Keynesians will supplement this by saying that prices can tend to be ‘sticky’. Let us ignore these for a moment and come back to them in a moment. Let us first take the idea that prices should fall when there is unemployed plant and equipment. Follow up: Please share this article - Go to very top of page,...

Read More »

Renovating the Fed

by John Mauldin, Thoughts from the Frontline Earnings don’t move the overall market; it’s the Federal Reserve Board…. Focus on the central banks and focus on the movement of liquidity…. Most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.– Stan Druckenmiller (hat tip Steve Blumenthal) Follow up: Please share this article - Go to very top of page, right hand side, for social media buttons. The Federal Reserve will soon have a...

Read More »

Beware the Scholastics! Some Thoughts on the Curriculum Reform Movement

by Philip Pilkington With the Rethinking Economics student movement in full swing the topic of curriculum reform is once again on the table. For those of you who read this aericle and are uncomfortable with this: sorry, you’ve already lost that debate, you just haven’t realised it yet. The question is now which direction this curriculum reform will take. Follow up: Please share this article - Go to very top of page, right hand side, for social media buttons. The Institute for New...

Read More »

Low Inflation Deflator and Inventory Increases Boost GDP

Second Estimate 3Q 2017 GDP In their second estimate of the US GDP for the third quarter of 2017, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +3.30% annual rate, up +0.32% from the previous estimate and up +0.24% from the prior quarter. Follow up: Please share this article - Go to very top of page, right hand side, for social media buttons. The changes from the prior estimate reflect higher commercial fixed investment, higher inventory growth, more...

Read More »

The Bonfire Burns On

by John Mauldin, Thoughts from the Frontline “Life invests itself with inevitable conditions, which the unwise seek to dodge, which one and another brags that he does not know, that they do not touch him; but the brag is on his lips, the conditions are in his soul. If he escapes them in one part they attack him in another more vital part. If he has escaped them in form and in the appearance, it is because he has resisted his life and fled from himself, and the retribution is so much...

Read More »

Interest Rates and ‘Reserve Constraints’: Why Endogenous Money Works Without Central Bank Intervention

by Philip Pilkington Article of the Week from Fixing the Economists Endogenous money advocates often think that a central bank is required in order to offset increases in government borrowing. The story goes: the central bank targets the overnight interest rate by buying up government securities; if the government issues more debt in the form of securities to increase spending the central bank will soak this debt up to maintain the target interest rate. Thus government spending cannot...

Read More »

Bonfire of the Absurdities

by John Mauldin, Thoughts from the Frontline “Vanity of vanities, saith the Preacher, vanity of vanities; all is vanity.”– Ecclesiastes 1:2, King James Version (attributed to King Solomon in his old age) This week’s article takes a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week. Follow up: Please...

Read More »

Mortgage Default During the Great Recession Came from Real Estate Investors, Not Subprime Credit Holders

from Voxeu.org -- this post authored by Stefania Albanesi, Giacomo De Giorgi and Jaromir Nosal The Global Crisis narrative has suggested that an expansion of subprime credit was the reason for rising mortgage defaults, leading to the large-scale recession in 2007-09. Taking a closer look at the characteristics of subprime credit holders over the period, this column argues that the growth in mortgage defaults did not occur predominantly amongst subprime credit holders. Instead, it was real...

Read More »