Over at Equitable Growth: Morning Must-Read: Marshall Steinbaum: The End of One Big Inflation and the Beginning of One Big Myth
Morning Must-Read: Joe Romm: 2014 Was Hottest Year On Record Globally By Far, Reports Japan Meteorological Agency

Noted for Your Morning Procrastination for January 5, 2015

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

  1. Marshall Steinbaum: The End of One Big Inflation and the Beginning of One Big Myth: "Tom Sargent's... 'The Ends of Four Big Inflations'... I called it 'terrible history and questionable economics'... post-World-War-I monetary histories of Austria, Hungary, Poland, and Germany, which they all experienced hyperinflations, on the one hand, and Czechoslovakia, which did not, on the other... highly influential.... The titular Four Big Inflations were actually one big inflation... caused by the near-state-collapse embodied in the Treaties of Versailles, St. Germain-en-Laye, and Trianon... denuding the defeated... of... industrial capability... reparations.... Keynes' argument is that the reparations... exceeded... the maximum amount of government revenue that can be extracted from the productive economy.... A particularly important aspect of Keynes' argument is the tension between France and Poland's abject public finances, only made paper-solvent by ambitious reparations schedules.... [The] hyperinflations ended when the vague commitment to reparations imposed on them was removed by the League of Nations.... The German hyperinflation was a consequence of the postwar settlement, and most importantly, the huge reparations it faced....

  2. Nouriel Roubini: Where Will All the Workers Go?: "Recent technological advances... capital-intensive... skill-intensive... labor-saving.... The factory of the future may be 1,000 robots and one worker manning them... no guarantee... [of] gains in service-sector employment.... Foxconn... plans to replace much of its Chinese workforce of more than 1.2 million with robots.... Voice recognition software will replace the call centers of Bangalore.... And, of course technological innovation... together with the related winner-take-all effects [are] driving the rise in income and wealth inequality.... The gains from technology must be channeled to a broader base... a major educational component... permanent income support to those whose jobs are displaced by software and machines..."

  3. Simon Wren-Lewis: In Defence of NGDP Targets: "Tony Yates... [is] slamming the idea of NGDP targets.... I want to stay close to the academic literature, at least as a starting point.... Tony should be very worried that one of the supporters of NGDP targets is Michael Woodford, who literally wrote the book on modern monetary theory. He rightly focuses on the big plus for any levels based target, which is that it can mimic the optimal but time-inconsistent policy.... The welfare gains from following the optimal time inconsistent policy are large... so to wave those away as ‘difficult to communicate’ seems--if I may say so--terribly old school central banking.... One final argument Tony uses... is that simple models show that inflation variability is about twenty times more important than output variability in assessing welfare, and therefore NGDP targets give too great a weight to output.... Having said all this, it is great that Tony is opening up the discussion on the correct level, so we can get away from what often seem like faith-based arguments for NGDP targets.... My one last plea is that arguments make clear whether a NGDP targeting regime is being compared to some form of optimal policy, or policy as currently practiced: as I suggest here these are (unfortunately) different things."

Should Be Aware of:


  1. Mu-Jeung Yang: I was planning on posting merry pictures from Dubai tonight. Instead, I have to report that I was attacked by a pack of white people in the middle of Capitol Hill, Seattle. I was choked, while three (white) people kept on punching me. I was kept paralyzed on the ground. Seattle police did nothing. They got my version of the story while confirming with six other people that it happened another way. Three of which kept on beating me while I was chocked on the ground by a fourth person. I do not write this because I want pity. I am upset! What is wrong here?!? I lived 22 years in Germany, a country that supposedly has Neo-Nazis. I was never treated this way there."

  2. "Some reacted to Chris Hughes's hiring of Gabriel Snyder and firing of Franklin Foer and Leon Wieseltier by writing things like: 'The [Old] New Republic has been the flagship and forum of American liberalism. Its reporting and commentary on politics, society, and arts and letters have nurtured a broad liberal spirit in our national life. The magazine’s present owner and managers... seem determined to strip it of the intellectual, literary, and political commitments that have been its essence and meaning. Their pronouncements suggest that they hold those commitments in contempt...' Others think that that Old New Republic was long dead. Some of them say it died in 1975, when Marty Peretz fired Gilbert Harrison. Others of them say it died 1991, when Marty Peretz fired Hendrik Hertzberg. Since then there had been only a shambling zombie, populated by various writers--some very good, others very bad, whose principal distinguishing characteristic is their willingness to go the extra mile to suck up to the racial and religious bigotry of Martin Peretz. As Fellow Travelers of the Juice-Box Mafia, we cannot see why anyone would think that Chris Hughes's money is likely to be less-well deployed by Gabriel Snyder than by Franklin Foer. Cf.: Max Fisher: The New Republic and the Beltway Media's Race Problem. Spencer Ackerman: Best of toohotfortnr"