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(Needless to say, I do not necessarily agree with them or endorse them.)
Category Archives: Economists
Economics as a Moral Science. American Economic Review: Papers & Proceedings 2011
The annual Papers & Proceedings issue of the American Economic Review is always a good read. It is literally full of papers from leading scholars on the newest “hot” topics in the profession as well as updates on the status of more enduring topics. The format of the issue is ideal for those who want a fairly quick introduction or refresher on a subject, since each is covered by three to four short papers that made up the corresponding session at the recent winter meetings of the American Economic Association. For those who think that economics is a narrow-minded science, it is recommended to pick up the latest issue to … Continue reading
Posted in Economic Sciences, Economics, Economists
Tagged Adam Smith, American Economic Review, animal spirits, Anthony B. Atkinson, Benjamin M. Friedman, Jagdish Bhagwati, John Maynard Keynes, Moral Science, Religion, Robert J. Shiller, Virginia M. Shiller, Worldly Philosophers
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The Real Ariel Rubinstein. Exposed at his 60th birthday
A couple of months ago, one of the world’s leading game theorists (its unclear whether he would like to be called that anymore, but it is what he is generally considered to be), turned 60. To celebrate the occasion, some of his students prepared a “Festschrift” to his honor. This is definitely not a normal piece. On the contrary! It is presented as a collection of “leaked” documents disclosing various moments in the academic life of Rubinstein. It even has a foreword by Julian Assange (or does it?). Everything is very nonsensical and completely hilarious. It is academic economist humor at the highest level. So I would really encourage you … Continue reading
Posted in Economists
Tagged Ariel Rubinstein, economists' joke
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John Cochrane on QE2
I have previously mentioned John Cochrane on this blog as a good example of an economist who insists on using sound academic arguments in even the most heated debates. That this does not imply death by boredom, he shows in a recent commentary on quantitative easing at bloomberg.com : “Is QE2 a Savior, Inflator, or a Dud?: Business Class“. Ben Bernanke said the following about QE2 in March 2011: “Yields on 5- to 10-year nominal Treasury securities initially declined markedly as markets priced in prospective Fed purchases; these yields subsequently rose, however, as investors became more optimistic about economic growth and as traders scaled back their expectations of future securities … Continue reading
Posted in Economists
Tagged Ben Bernanke, Federal Reserve, John Cochrane, Quantitative easing
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Steady as she goes: The ECB keeps policy rate unchanged again
After having raised the key policy interest rate in April (from 1 to 1.25 %), the ECB kept it unchanged on June 9, thus repeating their “non-action” of May. This is a somewhat bold and perhaps unconventional move by a central bank whose overriding legal mandate is price stability. Given their own definition of price stability as meaning an annual Euro-wide HICP-inflation rate not above 2%, you would have thought that the increase in April would have been followed by further increases. After all, HICP-inflation is currently above 2.5%, and unemployment is falling slightly (continuing the downward adjustment, which I have argued earlier could have been the trigger for the … Continue reading
Posted in Economists, Macroeconomics, Monetary policy
Tagged Andrew T. Levin, Benjamin K. Johannsen, Euro, European Central Bank, interest rate, Jean Claude Trichet, Meredith J. Beechy
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Politics beat quality any day: Diamond calls it quits
Politics are powerful. Much more powerful than scientific arguments. This is probably a well-known dictum, and I am certain that I could find some cool references to great thinkers who have said something like this in the past. I have refrained from doing so, as I just wanted to put this recent example within economics on record: In the US, members of the board of governors for the Federal Reserve are appointed through a long-winded political process. The fact that elected politicians should have a saying in the nomination of members who will shape monetary policy is sensible from a democratic point of view. I will not dispute that. However, … Continue reading
Posted in Economists, Monetary policy
Tagged Central bank governance, Central bank independence, Paul Diamond
1 Comment
“Hi Mom”: Ben Goes Inflation Targeting
I know. This is a VERY late post. I am going to write a few remarks about something that happened 2 1/2 weeks ago. Old news. Nevertheless, big events deserve a comment even after a while. In the April 27 video above, Federal Reserve chairman Ben Bernanke is seen in a press conference following the FOMC’s decision to keep the Fed funds rate unchanged within its 0-0.25% zone. What makes this of significance is that it, as I see it, marks the moment where the United States officially enters the group of inflation-targeting countries. He explicitly mentions two percent (or a “bit less”) as the average inflation rate consistent with … Continue reading
Posted in Economists, Macroeconomics, Monetary policy
Tagged Ben Bernanke, Federal funds rate, Federal Reserve, Inflation targeting
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Can the US Go Bankrupt? Yes, of course it can
A few days ago, the rating agency Standard & Poor’s changed its rating of US government bonds from the usual (highest possible) AAA to a similar one, but with a “negative outlook warning”. This caused havoc around the blogosphere and in policy circles. Some claimed that this was an untimely private, and politically motivated, action serving to undermine public spending programmes in the US. In any case, the market didn’t take much notice, as the interest on government bonds moved little. “Poor Standards” as Paul Krugman called it. He may be right. After all, S&P did funny ratings in the past (remember house-backed securities pre 2007?). And, by the way, … Continue reading
The Taylor Plot: A European View
January this year, John Taylor posted a scatterplot on his blog. He plotted quarterly US unemployment against fixed investment as a fraction of GDP for 1990q1-2010q3, and found a very strong negative correlation (jpg ). In contrast, the relationship between government spending and unemployment tended to be positive, albeit not so strong. On the latter finding he notes that “the correlation is not due to any reverse causation from high unemployment to more government purchases”. Overall, he therefore concludes that “Encouraging the creation and expansion of businesses should be the focus on government efforts to reduce unemployment” and further: “The recent compromise agreement to prevent the increase in tax rates … Continue reading
Posted in Economics, Economists, Macroeconomics
Tagged causality, correlation, European Union, Investment, John B. Taylor, Justin Wolfers, N. Gregory Mankiw, Paul Krugman, Unemployent
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