Recent Posts

Monday, September 27, 2021

Rudd Inflation Expectations Article

Jeremy B. Rudd caught a fair amount of attention with his recent discussion paper “Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)” The text has a lot of zingers that post-Keynesians would write, but Rudd is in fact a researcher with the Federal Reserve.

Friday, September 24, 2021

Trillion Dollar Coins And Debt Ceilings (Again...)

The periodic debt ceiling silliness has again erupted in the United States. Since I was feeling mildly unwell this week, I was largely out of the loop. If the reader wants a brief explanation of what the trillion dollar coin idea is about, I highly recommend my brief discussion in my latest book Modern Monetary Theory and the Recovery.

If we go beyond the shameless self-serving plugs, it is quite easy to summarise my views.

Tuesday, September 21, 2021

Transitory-Ness In The TIPS Market

Figure: TIPS Forward Breakeven

With all the debate about the persistence of inflation, one natural thing to ask is: what is the market pricing? Unfortunately for those who are selling a “return to the 1970s” narrative, “Mr. Market” is firmly in the camp of “Team Transitory.” Of course, one imagines that the immediate response is that the “markets are wrong.” Since many of the people in the “inflation is coming!” crowd are also in the “markets are always right” camp, there is a good chance they might modify the argument to “markets are wrong according to some affine term structure model.”

(Note: The server issues that stopped me from posting this yesterday are obviously sorted.)

Friday, September 17, 2021

Supply Chain Worries Not Macro-Friendly

I started a piece and then scrapped it, so I will just make a short comment on what I am seeing. Putting aside the questions of how the pandemic will evolve (I am not the person to ask), inflation and/or supply chain issues are obviously the main concern, with a secondary helping of politics.

Tuesday, September 14, 2021

Inflation History Overview (For Some Selected Countries)

Note: This is a preliminary draft of a section from my inflation primer. It is an overview of the “modern” inflation experience for a few developed countries. I expect to add data and comments for a few continental European and Antipodean countries later. This content will be familiar to anyone who has pored over historical inflation charts, but not everyone is in that boat. As for the readers interested in my modelling work, I put up a post on my Patreon about the latest additions to my agent-based modelling package. Although it did not add new content to the model, this work will now make it easier to add new complex agents to the mix.

Friday, September 10, 2021

Why I Don't Buy Demographic Interest Rate Stories

There has been a couple of articles that have attracted attention recently in the area of interest rates. Matthew C. Klein offered a summary of them in “Inequality, Interest Rates, Aging, and the Role of Central Banks.” The first paper was by Adrien Auclert, Hannes Malmberg, Frédéric Martenet, and Matthew Rognlie, and the second by Atif Mian, Ludwig Straub, and Amir Sufi.

Tuesday, September 7, 2021

Hyperinflation! (Primer)

Hyperinflation is a phenomenon that has caused a significant amount of hyperventilation within economic and market commentary. The pictures of people using wheelbarrows of money to go shopping are certainly memorable.

NOTE: This is an unedited draft of a section that will make its way into my inflation primer. I have kept this section minimal, but may add more later during editing.