Recent Posts

Sunday, October 23, 2016

Money-Financed Fiscal Stimulus: Nothing To Do With "Money"

As I have noted repeatedly, the problem with writing about "Helicopter Money" is that the people advocating it are extremely vague about what it actually is. I tried going through the Jordi Galí paper - "The Effects of Money-Financed Fiscal Stimulus" - as that paper allegedly provided a formal explanation of how "overt monetary financing" is supposed to work. Unfortunately, "money" has nothing to do with the results in that paper.

Thursday, October 20, 2016

SFC Model Update

I have been doing some writing (dealing with the silliness that is Helicopter Money), and working on my Stock-Flow Consistent (SFC) modelling tools for Python. The progress on that package has been quite good.

UPDATE (2016-10-21): A first version is built, and I have an installer. See notes below.

Monday, October 17, 2016

SFC Models Library For Python

I have been "in the zone" for coding the last little while, and have an initial version of a Python library to analyse Stock-Flow Consistent models. I still need to work on making the package easier to install, so I will wait to give a fuller description when that is ready. Since I am supposed to be finishing a book, there are no guarantees when that will happen. (Although I expect to use this module within the following book, so the delay will not be too long.)

Sunday, October 16, 2016

Primer: Low Yields and Duration

Chart: Consol price.
The current low yield environment generates considerable anxiety about the bond market. Some of this reflects the reality that it is more entertaining to read articles predicting doom. However, my suspicion is that this reflect the fact that the consol pricing formula is one of the few things people remember about fixed income pricing.

Thursday, October 13, 2016

Launching Open Source Code Libraries

Chart: Bond Price Figure Generated by Python Libraries
Figure generated by Python library code
I have created a basic fixed income pricing package in the Python programming language -- the "simplepricers" package, available at Github: . The code is open source, but the package is now extremely small -- so far, I have spent a lot of time developing my work flow. This package will be used to do fixed income analysis in my books -- and readers will be able to use the source code to replicate the results. For those of you with an interest in economics, I want to package my Stock-Flow Consistent model code in another open source library.

Wednesday, October 12, 2016

Will Treasury Yields Ever Escape The Low Yield Trap?

Chart: U.S. 10-year Treasury Yield

I was at a dinner last week that was associated with a financial industry conference in Montréal. The investors were generally not focused on fixed income, but I was asked the following question - is there anything which will drive developed country yields up? Furthermore, I have seen a number of recent articles declaring how rising bond yields will lead to some sort of crisis, so I just want to refresh comments that I have made on this topic over the past few years.

Sunday, October 9, 2016

The Political Problems with Helicopter Money

One of the problems with “helicopter money” is that the proponents of the concept give very sketchy and differing descriptions of what it actually is. From my personal perspective, another difficulty with discussing the idea is that I disagree with the politics. Depending on how “helicopter money” is conceived, either it is an insult to the intelligence of the electorate, or it is premised on the idea that politicians are structurally biased towards favouring deflationary policies – a stance for which there is very little evidence.