Recent Posts

Thursday, April 8, 2021

Asset Prices And Inflation

One of the more heated debates around inflation is whether asset prices should be included within the concept. House prices are the main area of concern, since one of usual characteristics of middle-class lifestyle within the developed world is home ownership. Financial asset prices – mainly stock prices – also pop up in the conversation.

(Note: This is an unedited draft of an introductory chapter from a manuscript about inflation. Not giving detailed analysis, rather explains why I am interested in the relation between asset prices and inflation.)

Monday, April 5, 2021

U.S. Economy Getting Better, But...


Although I expect to see fairly impressive rates-of-change in economic variables over the coming months, levels matter as well. Under normal circumstances, the economy is relatively close to its steady state glide path, and the fixed income market is quite reasonably jittery with respect to the latest growth rates. (I would argue too sensitive, but people who are paid to stare at lines all day generally want to make the backstory about those lines as exciting as possible.)

Thursday, April 1, 2021

Is Money Supply Growth The True Definition Of Inflation?

One of the more unusual diversions in the discussion of inflation is the argument made by Austrian economists that inflation is defined as growth in the money supply. I outline the reasons for my disagreement in this article.

(Note: This is an unedited draft from a manuscript that discusses inflation.)

Monday, March 29, 2021

Econwars Blogging Is Back, Or What?

I have seen a few articles discussing the rise of the new economics debates, MMT, and blogging versus Twitter econ. I just want to make a few scattered observations.

The underlying story is the debate about inflation risks that relate to Biden's fiscal package. My bias is to expect inflation to be low and stable, but there are a lot of disruptions hitting global supply chains (the blockage of the Suez being the latest).  I do not have enough conviction to take a strong stance. Meanwhile, the inflation nutters will seize on practically any rise in inflation or bond yields as a signal to take victory. As such, I am dodging that fundamental debate.

Can We Replicate DSGE Models With An Agent-Based Model?

I have another non-paywalled draft PDF on my Patreon (link). They are initial musings about a theoretical question: can we implement an agent-based model, and have it converge to a DSGE model equilibrium solution?

The text is somewhat rough, as it is a brainstorming document rather than a finished product. My conjecture is that the only way to get a DSGE-style equilibrium is to force the agents to use that solution, which is not within the "spirit" of agent-based modelling.

With that digression out of the way, I have returned to puttering around with my Python agent-based framework. The code is still preliminary, and I would not yet describe it as a functioning model. However, within a few weeks, it should start to resemble a very simple model that could be related to an aggregate model of the economy.

(As for my Patreon, for now I am now treating it as a place to host free PDF's. Once the agent-based framework is in a functioning state, I will place high-level design documents as a treat for Patrons, and it
would be "open for business" in a real sense.)

Thursday, March 25, 2021

Book Review: Agent-Based Models In Economics: A Toolkit

The book Agent-Based Models in Economics: A Toolkit (Amazon affiliate link) is a collection of articles edited by by Domenico Delli Gatti, Giorgio Fagiolo, Mauro Gallegati, Matteo Richiardi, and Alberto Russo. (I will refer to them as "the editors" in this article...) I picked up this book as it appears aimed at my new interest in agent-based models. 

Given the diversity of the articles within the text, I will not attempt to make this an academic book review, instead being closer to a book review on an online book store: who would be interested in buying this book? The book is somewhat more "literary" in style than I hoped for, but it might be of interest for those who enjoy economic theory controversies.

DSGE Notation Comments

I have put up a non-paywalled draft PDF about DSGE model notation. It's a rehash of things I have written earlier, but since I can stick PDF's on Patreon, I formatted it properly using LaTex. 

I do not view this as a topic of burning interest for me. However, I am in the process of writing a short comment on agent-based models and DSGE models, and I needed this background.