Wednesday, October 18, 2017
The Treasury yield curve has continued its relentless flattening. The 5-/10-year slope has hit a new post-crisis low. We should not be too surprised by a flattening yield curve during a hiking cycle, but at the same time, the pace of rate hikes has been laughable.
Note: I have been tied up with other projects (my SFC models book is ready to be shipped for the final editing pass), so this article will be extremely brief. I just wanted to let readers know that there will be publishing hiatus until the weekend. (Although this is a free website, I want to keep to a regular writing schedule, particularly on Wednesday.)
Sunday, October 15, 2017
Thursday, October 12, 2017
Abolish Money (From Economics)! returned to Twitter today, and I just want to give a long form version of my arguments. The debate was with Eric Lonergan (web site) regarding where money should show up on the government's balance sheet. I discussed this topic in Chapter (Section?) 14 of Abolish Money -- "Money as Debt."
Wednesday, October 11, 2017
Sunday, October 8, 2017
The Price Level Does Not Exist -- was tentative, and needed a more detailed explanation of my thinking. This article is an attempt to give a more detailed background, and I am tying it to inflation targeting. It should be noted that this is not just a jab at mainstream economics, it also applies to some post-Keynesian thinking. For example, one might summarise the policy goals of Modern Monetary Theory (MMT) as "full employment with price stability" -- which is somewhat awkward if we cannot define a price level that is supposed to be stable. (This observation about MMT came to me during the recent MMT conference, and the article reflected my on-the-spot thinking.)
Wednesday, October 4, 2017
In a previous article, I explained why I am complacent about the state of economic theory in Modern Monetary Theory (MMT). This matters for someone like myself, who is attempting to write primers explaining various economic concepts. However, for many followers of MMT, the more important question is how its theoretical concepts get translated into a new policy framework. This raises the question of political economy, which I largely shy away from. However, I will offer my eccentric political views on the future of MMT.
Sunday, October 1, 2017
Update: Based on some reader feedback, I realise that I need to fill out parts of my logic in more detail. To repeat what I wrote below, I am unsure how my thinking fits in with the existing academic literature in this area. I am looking at this from the point of view of building a model that fits observed data, and there's some purist theoretical issues about price indices that I am not concerned about. Merijn Knibbe left this reference, which overlaps some of my thinking. The more detailed version will probably have to follow this weekend, since Professor Wren-Lewis caused yet another internet discussion that I want to weigh in on...