Wednesday, July 30, 2014
The book "Money: The Unauthorized Biography" by Felix Martin is a comprehensive popular history of money. Money and banking are topics of considerable interest since the end of the financial crisis, and they are also areas of great confusion. In this book, Felix Martin offers a clear history of the subject.
Sunday, July 27, 2014
Brad DeLong has a good discussion on the convergence of views between New Keynesian and Market Monetarist theories of why economies face aggregate demand shortfalls. (Real Business Cycle theorists do not recognise the concept of an aggregate demand shortfall, so they are obviously not going to converge with the other groups.) The idea is that monetary and fiscal policy need to be coordinated, instead of a monetary policy-centric viewpoint that was the consensus before the crisis. In this article, I augment his analysis by applying the labour market analysis Minsky originally developed in the 1960s.
Wednesday, July 23, 2014
Sunday, July 20, 2014
Wednesday, July 16, 2014
Noah Smith discusses at the Bloomberg View the strange idea that floats around on the internet - that the current low interest rate regime is "artificial". The idea being that "the market", if left to its own devices, would set interest rates higher. He discusses why that view makes little sense. However, I would amplify his arguments to state that it is almost impossible for "markets" to set interest rates, other than by completely restructuring the economy in a fashion where the government and existing pools of finance capital largely disappear.