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Tag Archives: Interesting Papers

Brazilian Inflation

This marvelous plot comes from an interesting article, The Monetary and Fiscal History of Brazil, 1960-2016 by Joao Ayres, Marcio Garcia, Diogo A. Guillén, and Patrick J. Kehoe. The article is part of the Becker-Friedman Institute Project, complete with a big and now easily available data collection effort, and forthcoming book. If you want a deep historical and economic analysis of fiscal and monetary interactions, this is an amazing resource. And it summarizes historical episodes that...

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Infrastructure and jobs

William Gropper, Construction of the Dam, 1938To many on the left, it's always 1933. Building "roads and bridges" will "create jobs," soaking up the mass army of unemployed desperate for work that they seem to see. Driving around though, I notice that we build roads with big machines, not lots of people. And construction jobs are high-skill jobs, not people with shovels. "Shovel-ready" itself is a misnomer. Nobody uses shovels on a construction site anymore, they use a backhoe. Neither...

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Inequality mirage?

David Splinter and Gerald Auten gave last week's Hoover Economic Policy Working Group seminar, summarizing their past and some work in progress on the distribution of income.  Link in case the above embed does not work. A recent paper. Splinter's web page. Splinter and Auten are very even handed, just-the-facts, economists. I'll pass on their facts. Grumpy interpretations are my own. It is a fact generally accepted that income inequality has grown a lot recently, and this is a...

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Paper, silver, deficits and inflation — Chinese history version

A history of paper money and inflation in China, from Edward Chancellor's Wall Street Journal review of Jin Xu's Empire of Silver.  In these sparse paragraphs is most of monetary (and fiscal!) theory, along with a history I was not aware of.Paper money, Ms. Xu tells us, dates back to the Tang dynasty in the ninth century, when the authorities allowed merchants to exchange bronze coins for promissory notes, known as “flying cash.” Two centuries later, in the time of the Song dynasty,...

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r < g

r<g is an essay on the question whether r<g means the government can borrow and not worry about repaying debts. No. Abstract: A situation that the rate of return on government bonds r is less than the economy's growth rate g seems to promise that borrowing has no fiscal cost. r<g is irrelevant for the current US fiscal problems. r<g cannot begin to finance current and projected deficits. r<g does not resolve exponentially growing debt. r<g can finance small...

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Gamestop. 1999 déjà vu all over again?

In case you haven't noticed, Gamestop and a few similar stocks are in a classic bubble. At least it was at 8 AM pacific when I read the print WSJ, possibly not at 9:30 AM as I write. What's going on?It's not the only time. This sort of thing has happened over and over again through history, most recently in the late 1990s. It's too easy to just say "people are dumb," and move on. That can explain everything. Instead, we can and should as always look at a repeated phenomenon like this and try...

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Bisin on MMT Rhetoric

Alberto Bisin has written an intriguing short review of Stephanie Kelton's The Deficit Myth. Alberto focuses on the rhetoric of MMT and the book. (My review here FYI.) MMT's rhetoric is surely its most salient feature. It has been phenomenally successful in terms of gaining attention, and it has eschewed all the traditional rhetoric of economics -- academic articles, conference presentations, monographs full of equations, econometric estimates and...

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A Neo-Fisherian Challenge and Reconciliation

 Lars Svensson has a very interesting challenge to the Neo-Fisherian view. (See link for slides.) What happens to inflation and unemployment when the central bank (for no good reason) raises the policy rate by 175 bp?...Sweden did, which provides  ..a natural experiment of the neo-Fisherian view: Does inflation really increase after a policy-rate increase? Despite roughly the same circumstances as many other countries, including the US, Sweden in 2010 raised rates 175 bp....

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1933 lessons for today

Nov 11, Eric Leeper presented "Recovery of 1933" with Margaret  Jacobson and  Bruce Preston, at the Hoover "Road Ahead for Central Banks" series, and it was my pleasure to discuss it. This is a really important and insightful paper.  Since Japan hit the zero bound more than 25 years ago, economists have been thinking about how to avoid deflation. The answer seems obvious -- "helicopter money," or "unbacked fiscal expansion." But this has proved remarkably hard to do. Jacobson,...

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Fifty shades of QE. Research in the bubble.

It always struck me that research inside the Fed seems to produce answers closer to the views of Fed officials than does research outside of the Fed. Perhaps my experience of reading a speech by Ben Bernanke one morning and attending a workshop by a Fed economist that found exactly his guess of the (implausibly large, to me) effects of QE that afternoon colored my views. In "Fifty Shades of QE:" Brian Fabo, Martina Jančoková, Elisabeth Kempf,  and Luboš Pástor quantify this...

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