Corey Robin vs. Friedrich von Hayek in Syrakusa, Augusto Pinochet, and the Lykourgan Moment
Liquidity Preference, Loanable Funds, and Interest Rate Spreads: Wednesday Hoisted from the Archives from Two Years Ago Weblogging

Noted for June 26, 2013

  • Carola Conces Binder: The Sword of Greenspan: "Let's look back at the Federal Reserve transcripts from 1994, when Alan Greenspan himself alluded to the sword of Damocles on multiple occasions. At the first meeting of the year, on February 3-4, the federal funds rate was at 3%, after having been lowered repeatedly since 1989. Discussions centered around how much to raise the rate. Mostly it was a question of raising by 25 or 50 basis points…. 'Chairman Greenspan: I thought about 50 basis points, or I thought about it in the sense of trying to move the rate to where we want to put it and then sticking with it. But I think it may be very helpful to have anticipations in the market now that we are going to move rates higher because it will subdue speculation in the stock market; at this particular stage having expectations hanging in the market that we may move again, and move reasonably soon, could have a very useful effect. If it is in any way contemplated that we have moved and are going to stop, that could create the type of erosion in the economy that I've watched over the past decades, which is precisely what we don't want. If we have the capability of having a Sword of Damocles over the market we can prevent it from running away…. If we're going to move, I would not mind moving again at the next meeting or the meeting after that, for example. That depends on the evolution of events, frankly.' Greenspan got his way…. The February 14, 1994 New York Times reported that 'in the two weeks since the rate action, it appears that rather than reassuring traders and investors, the Federal Reserve has managed to leave them with a worse case of the jitters. The financial markets seem to have increased their focus on inflation amid a general consensus that the Federal Reserve will have to raise short-term interest rates again soon. Both factors have led to a sharp selloff in the bond market and a jump in both long- and short-term interest rates'."
  • Dani Rodrik: The Past, Present, and Future of Economic Growth; "Developing countries will face stronger headwinds in the decades ahead, both because the global economy is likely to be significantly less buoyant than in recent decades and because technological changes are rendering manufacturing more capital and skill intensive. Desirable policies will continue to share features that have served successful countries well in the past, but growth strategies will differ in their emphasis. Ultimately, growth will depend primarily on what happens at home. The challenge is therefore to design an architecture that respects the domestic priorities of individual countries while ensuring that major cross-border spillovers and global public goods are addressed."

    • Ashok Rao: Notes on falsifying Fiscalism: "Have you been advocating that fiscal stimulus is unnecessary for the past four years? Do you want help in defending your position? Are you a die-hard monetarist? Are you annoyed at how right Paul Krugman has been? What follows is your best shot at disproving him. Tread with trepidation."
  • Matthew Yglesias CREDO charter school study: Quality improving, remains very mixed.: "In DC, Tennessee, Rhode Island, Louisiana, Massachusetts, New York, and New Jersey the charter students do way better on average than the non-charter students. In Arizona, Arkansas, Nevada, Ohio, Oregon, Pennsylvania, and Texas it's just the reverse. Some of that may be a coincidence, but a fair amount is probably a result of systematic policy issues. Texas' traditional public schools are above average in terms of student learning outcomes and yet it has very loosey goosey chartering practices. DC has both a stronger charter authorizing system and a weaker traditional public school system, so DC charters look great. In general a strategy of letting a thousand flowers bloom only really works if you then cut down the flowers that turn out to be really ugly and let then let the better ones replicate. Some states do that and others don't."

  • Tasha Eichenseher: What the Frack is Up with Drinking Water and Shale Gas Extraction?: "A study out today in the journal Proceedings of the National Academy of Sciences helps to build the case that the practice of hydraulic fracturing, or 'fracking', does indeed pollute underground water reserves. Researchers from Duke, the University of Rochester and California State Polytechnic University analyzed 141 drinking water wells in northeastern Pennsylvania and southern New York, near the Marcellus shale… drinking water they tested in homes less than a kilometer away from a natural gas well, 82 percent had well-related methane levels that averaged six times higher than levels found in homes farther than a kilometer…. 'Overall, our data suggest that some homeowners living < 1 km from gas wells have drinking water contaminated with stray gases', wrote the study authors. They speculate that natural-gas-well casings may be leaking, and that the geology of the formation makes a difference in terms of what can and can’t migrate to drinking water supplies."

Screenshot 6 25 13 11 29 AM Jeff Goodell: Why the City of Miami Is Doomed to Drown: By century's end, rising sea levels will turn the nation's urban fantasyland into an American Atlantis. But long before the city is completely underwater, chaos will begin | Ryan Avent: Monetary policy: "We are not tightening", says a tightening Fed | Thomas Nagel: Libertarianism without Foundations: Review of "Anarchy, State, and Utopia" by Robert Nozick | Paul Krugman: Florida Versus Spain, An Update | Serdar: Genji Press: Science Fiction Repair Shop | Miles Kimball: Pounds of Carbon Dioxide Produced Per Million British Thermal Units of Energy When Different Fuels are Burned: "Coal (anthracite) 228.6; Coal (bituminous) 205.7; Coal (lignite) 215.4; Coal (subbituminous) 214.3; Diesel fuel & heating oil 161.3; Gasoline  157.2; Propane 139.0; Natural gas 117.0." |