Previous month:
June 2016
Next month:
August 2016

July 2016

Links for the Week of July 31, 2016

Most-Recent Must-Reads:

Most-Recent Links:

Most-Recent Storified:

Continue reading "Links for the Week of July 31, 2016" »

Monday DeLong Self-Smackdown: DeLong (2000) Sees the Trees, But Overlooks the Forest as Far as the Macroeconomic Dangers of Low Inflation Are Concerned...


What a maroon this guy DeLong (2000) was!:

"The increased risk of deflation and depression in a low-inflation environment can be oversold..."

"Low inflation raises the chance that at some point the turning of the wheel of the business cycle will generate deflation. How great is this danger? How is it to be guarded against? The answer is: not very great. Low trend inflation does raise the chance that a contractionary shock might push goods-and-services price indexes down. But what we fear about deflation can be generated by asset price 'deflations' and foreign-currency debt 'deflations' as easily as by goods-and-services price index "deflations." A period of price stability certainly does not increase the chances of either of these alternative sources of contractionary shocks..."

Continue reading "Monday DeLong Self-Smackdown: DeLong (2000) Sees the Trees, But Overlooks the Forest as Far as the Macroeconomic Dangers of Low Inflation Are Concerned..." »

America's Historical Experience with Low Inflation: Hoisted from 1999

J. Bradford DeLong (2000): America's Historical Experience with Low Inflation, Journal of Money, Credit and Banking 32:4, Part 2: (November), pp. 979-993

Abstract: The inflation of the 1970's was a marked deviation from America's typical peacetime historical pattern as a hard-money country. We should expect America to continue to be a hard-money--low inflation--country in the future, at least in peacetime.

Continue reading "America's Historical Experience with Low Inflation: Hoisted from 1999" »

Must-Read: A piece from Paul Krugman three years ago that I put aside to think about because I didn't really understand what argument he was trying to make. I am pulling it out again because I was reading Adair Turner.

Adair, seeking supporters for his advocacy of helicopter money, recruits as authority number one Ben Bernanke. That's great!

He then recruits as authority number two... me. That's not so great. There ought to be somebody of more weight and reputation--and intelligence--on the pro-helicopter money side. I wish I could do something to boost my reputation overnight (my weight is already more than high enough, thank you very much). But I can't. So all I can do is to try to become more intelligent, and think smarter thoughts about helicopter money. So the first question is: what argument am I (and Ben, and Adair) making?

Paul Krugman (2013): Helicopters Don't Help:

David Beckworth has a good piece on... the irrelevance of the decision to finance budget deficits by printing money as opposed to selling bonds...

Continue reading "" »

Live from the Republican Self-Made Gehenna: Ilya Somins makes some typos. Shame on the Washington Post for not correcting them! I have cleaned his piece up:

Ilya Somin: How Trump Strengthens the Forces of Political Correctness:

Political correctness feeds on the perception reality that many right of center political views are really just a cover for racism, ethnic bias, religious bigotry, and sexism...

Continue reading "" »

Procrastinating on July 30, 2016


Over at Equitable Growth: Must-Reads:

Continue reading "Procrastinating on July 30, 2016" »

Weekend Reading: Michael O'Hare: Magical Thinking Is a Moral Failing, Not a Charming Quirk

Google Image Result for https allabouttravelokc files wordpress com 2012 04 exteriornightlights6x8in jpg

My colleague and neighbor Michael O'Hare is fed up with and denounces Berkeley NIMBYist privilege. I have two reactions:

Continue reading "Weekend Reading: Michael O'Hare: Magical Thinking Is a Moral Failing, Not a Charming Quirk" »

Live from the Republicans' Self-Made Gehenna: The Houston Chronicle: These Unsettling Times Require a Steady Hand: That's Not Donald Trump:

Houston Chronicle Editorial Board endorses Hillary Clinton: On Nov. 8, 2016, the American people will... choose between one candidate with vast experience and a lifelong dedication to public service and another totally lacking in qualifications to be president...

Continue reading "" »

The Federal Reserve: I Repeat Myself

Real Gross Domestic Product FRED St Louis Fed

I repeat myself: to begin a tightening cycle and a process of interest-rate increases in December 2016--in fact, to announce in mid 2014 the end of further moves toward monetary expansion and a bias toward tightening as soon as it is not grossly imprudent--requires that one place only an infinitesimal weight on:

  1. Bond market very pessimistic long-run expectations.
  2. The asymmetry in policy responses and thus in risks created by the zero lower bound on short-term safe nominal interest rates.

I have been asking for quite a while now why any FOMC would choose to place such an infinitesimal weight not on just one but on both of these considerations. I have not gotten an answer from anywhere. I would like one. Very much...

What More Has to Happen Before the Fed Concludes That This Looks Like Yet Another Failed Interest-Rate Liftoff?

Real Gross Domestic Product FRED St Louis Fed

If you had told the Federal Reserve at the start of last December that 2015Q4, 2016Q1, and 2016Q2 were going to come in at 0.9%, 0.8%, and 1.2%, respectively, a rational Fed would not only have not raised interest rates in December, they would have announced that they would not even think of raising interest rates until well into 2017, and they would have started looking for more things they could do that would safely boost demand.

So why is the FOMC now not cutting interest rates back to zero? I mean, what more has to happen before the balance of probabilities says that this is likely to be yet another failed liftoff of interest rates?

Procrastinating on July 29, 2016


Over at Equitable Growth: Must-Reads:

Continue reading "Procrastinating on July 29, 2016" »

Liveblogging World War I: July 29, 1916: Black Tom Explosion


Adrienne Wilmots Lerner: Black Tom Explosion:

The Black Tom explosion was the peak act of German sabotage on American soil during the First World War. On July 29, 1916, German agents set fire to a complex of warehouses and ships in the New York harbor that held munitions, fuel, and explosives bound to aid the Allies in their fight. Though America was technically a neutral nation at the time of the attack, general policies greatly favored the Allies. The attack persuaded many that the United States should join the Allies and intervene in the war in Europe.

Continue reading "Liveblogging World War I: July 29, 1916: Black Tom Explosion" »

Must-Read: John Maynard Keynes (1936): The General Theory of Employment, Interest and Money by John Maynard Keynes:

Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative.

Continue reading "" »

Can This Capitalism Be Saved?

Robert reich saving capitalism Google Search

Can This Capitalism Be Saved?

Here is piece of mine left on the cutting room floor elsewhere. So I might as well throw it up here.

Reviewing: Robert Reich: Saving Capitalism: For the Many, Not the Few

Robert Reich’s Saving Capitalism: For the Many, Not the Few is an excellent book. It powerfully argues that America needs once again—as it truthfully reminds us that we did four times in the past—restructure its institutions to build both private and public countervailing power against the monopolists and their political servants in order to right the distribution of income and boost the pace of economic growth.

Continue reading "Can This Capitalism Be Saved?" »

Weekend Reading: From W. Arthur Lewis (1977): The Evolution of the International Economic Order

End of export led growth would not be good for post crisis Asia Asia Pathways

W. Arthur Lewis (1977): The Evolution of the International Economic Order

We must therefore turn to economic explanations. The most important... is the dependence of an industrial revolution on a prior or simultaneous agricultural revolution... already familiar to eighteenth-century economists, including Sir James Steuart and Adam Smith. In a closed economy, the size of the industrial sector is a function of agricultural productivity. Agriculture has to be capable of producing the surplus food and raw materials consumed in the industrial sector, and it is the affluent state of the farmers that enables them to be a market for industrial products.

Continue reading "Weekend Reading: From W. Arthur Lewis (1977): The Evolution of the International Economic Order" »

Programming in the 21st Century...


Live from Northern California: "Code monkeys"--an insult to simians of all species: That's what I'm saying...

I am still marveling at the fact that last spring it took Berkeley’s bCourses system six hours to read a table of 10,000 numbers off of the and put it into its own database. And, of course, any network timeout anywhere in those six hours would cause the process to barf completely, saving none of its intermediate state.

All this for programs running on chips that work so fast that light travels less than a foot in each clock cycle...

Liveblogging History: July 28, 1932: The Bonus Army



Eric Lemieux: This Day in Labor History: July 28, 1932:

On July 28, 1932, the U.S. Army 12th Infantry regiment commanded by Douglas MacArthur and the 3rd Calvary Regiment, supported by six battle tanks commanded by Major George Patton violently evicted the Bonus Army from their Washington, D.C. encampment. This violent action and horrible treatment of impoverished veterans shocked the American public and demonstrated the utter indifference of Herbert Hoover to the desperate poverty the nation faced, helping to seal his overwhelming defeat that fall that ushered in the widespread change of the New Deal that would follow.

Continue reading "Liveblogging History: July 28, 1932: The Bonus Army" »

Procrastinating on July 28, 2016


Over at Equitable Growth: Must-Reads:

Continue reading "Procrastinating on July 28, 2016" »

Must-Read: Leah Schnelbach: Thinking Through Violence in The Just City and The Philosopher Kings:

In a different book, the narrative would become either ‘Maia’s recovery’ or ‘Ikaros’ redemption’, and Walton would track their lives and relationships with this night as a fulcrum point. Instead, it’s one night in their lives...

Continue reading "" »

Is the Semi-Permanent "Gunpowder Empire" Historical Scenario Plausible? Perhaps Not...

Islam Constantinople jpg 428×283 pixels

Riffing off of yesterday's: : "'Gunpowder Empire': Should We Generalize Mark Elvin's High-Level Equilibrium Trap?"...

A generation ago Michael Kremer wrote a superb paper: Michael Kremer (1993): "Population Growth and Technological Change: One Million B.C. to 1990", Quarterly Journal of Economics 108:3 (August), pp. 681-716

Kremer saw human populations as growing at an increasing rate over time. Population reached approximately 4 million by 10000 BC, 50 million by 1000 BC, and 170 million by the year 1. Population then reached 265 million by the year 1000, 425 million by 1500, and 720 million by 1750 before the subsequent explosion of the British Industrial Revolution and the subsequent spread of Modern Economic Growth.

Continue reading "Is the Semi-Permanent "Gunpowder Empire" Historical Scenario Plausible? Perhaps Not..." »

A Brief History of (In)equality: Now Live at Project Syndicate

Digesting Income Inequality Mind the Post

Over at Project Syndicate: A Brief History of (In)equality: BERKELEY – The Berkeley economist Barry Eichengreen recently gave a talk in Lisbon about inequality that demonstrated one of the virtues of being a scholar of economic history. Eichengreen, like me, glories in the complexities of every situation, avoiding oversimplification in the pursuit of conceptual clarity. This disposition stays the impulse to try to explain more about the world than we can possibly know with one simple model. For his part, with respect to inequality, Eichengreen has identified six first-order processes at work over the past 250 years.

READ MOAR of A Brief History of (In)equality at Project Syndicate

Liveblogging Postwar: Executive Order 9981

Harry truman Google Search

Harry Truman: Transcript of Executive Order 9981:

WHEREAS it is essential that there be maintained in the armed services of the United States the highest standards of democracy, with equality of treatment and opportunity for all those who serve in our country's defense:

NOW THEREFORE, by virtue of the authority vested in me as President of the United States, by the Constitution and the statutes of the United States, and as Commander in Chief of the armed services, it is hereby ordered as follows:

Continue reading "Liveblogging Postwar: Executive Order 9981" »

Procrastinating on July 27, 2016


Over at Equitable Growth: Must-Reads:

Continue reading "Procrastinating on July 27, 2016" »