Time for a (mostly) non-economics post/rant. Warning: Contains oversimplified history, sketchy data, and sweeping generalizations. In 1396, an allied force of European crusaders met an equally sized Ottoman Turkish force i...
Veronique de Rugy claims that there is no austerity in Europe, and Tyler Cowen nods approvingly. Then the Kenesians dogpile on the two of them and de Rugy walks it back, admitting she was just swinging at a straw man.
Cowen, in true Cowenesque fashion, doubles down, saying we don't get it because we're not as "deep" as him.
Maybe we're not as deep as Cowen, but when you're sinking as fast as he is, it's bound to be tough for the rest of us to keep up.
Let’s say that private gdp is 100 and government spending is 100. Gdp then suddenly goes up to 200, so government spending as a percentage of gdp falls from 50% to 33.3%. This is not a contractionar...
What I've always liked about Tyler Cowen is that he applies his economics to a wide variety of topics and issues. This allows him to be continually wrong in new and interesting ways. Not this time though. This time he's wrong in and old-fashioned and predictable ways.
Cowen says that "austerity" hasn't really been tried yet...in Europe! Holy S***! Don't tell the Europeans that! There's nothing they are more proud of than their austerity. And for God's sake don't tell the Bond Vigilantes!
Act as if you have log utility and with probability 1 your wealth will converge to infinity.
Sergiu Hart presented this paper at Northwestern last week. Suppose you are going to be presented an infinite sequence of gambles. Each has positive expected return but also a positive probability of a loss. You have to decide which gambles to accept and which gambles to reject. You can also invest purchase fractions of gambles: exposing yourself to some ...
The Fed's John Williams says that the natural rate of unemployment may have increased from 5% to 6.5%. I have no idea whether or not he is right, but his comments highlight two important facts.
First, the job that we ask the Fed to do is nearly impossible. How are they supposed to balance employment and inflation when it isn't obvious what level of unemployment they should target? It doesn't surprise me that they seem to ignore unemployment altogether, and this is a strong argument for NGDP targeting.
Second, every day that we wait to get back to the natural rate of unemployment, the higher the natural rate gets. Long term unemployment tends to make people less employable. The unemployment of today will echo for years. The Fed should be racing to do what they can to lower it.
"The person who says he knows what he thinks but cannot express it usually does not know what he thinks."
In graduate school I discovered that the best way to deeply understand complicated ideas is to teach them to someone else. The Feynman Technique incorporates that concept, but instead of teaching someone else, you start by teaching yourself.
I haven't tried their breakfast, but dinner was awful and overpriced. We figured with the prices they were charging that the food would be good. Not even close. It was the worst meal I've had in months. There was nothing good about it.
It also was messy inside, with one corner of the room dedicated to stacks of paperwork. I honestly don't know how they are still in business.