tag:blogger.com,1999:blog-5908830827135060852.post3263162838679494947..comments2021-01-21T10:08:21.455-05:00Comments on Bond Economics: The Theoretical Incoherence Of Full Employment ArgumentsBrian Romanchukhttp://www.blogger.com/profile/02699198289421951151noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5908830827135060852.post-33045600492647676212017-11-24T11:59:29.466-05:002017-11-24T11:59:29.466-05:00I threw in a remark sort-of discussing your point ...I threw in a remark sort-of discussing your point (from a more general point of view). I have a follow up article discussing what this all means.<br /><br />The beauty of a purely mathematical exposition is that it is clear what you are talking about. Trying to explain mathematics poses risks. Ideally, you avoid such explanations, and let the reader figure it out. One problem with DSGE macro is that there is often a wide divergence between what the paper’s mathematics says, and what the authors say it says.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-39260044671259600482017-11-24T11:25:08.646-05:002017-11-24T11:25:08.646-05:00"You are discussing issues that are outside t..."You are discussing issues that are outside the class of models in the proof."<br /><br />That's understood Brian. You're dispatching neo-liberal models that we already know have no export licence to the real world.<br /><br />I just wanted to make sure that statement in your proof wasn't used literally - out of context of the proof limits. NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-53511909524549216732017-11-24T06:59:40.114-05:002017-11-24T06:59:40.114-05:00You are discussing issues that are outside the cla...You are discussing issues that are outside the class of models in the proof. In the proof, we have standard labour-only production functions, where output increases solely based on the number of people working.<br /><br />Although it would be nice to have models in which everybody is different, it is very hard to see that they will ever converge to a steady state. In which case, we cannot make an definitive statements about things like “full employment.”<br /><br />We could have models with divided work forces, which are manageable. What we might see is that my market clearing assumption breaks: there is extra demand, but there is an inability to hire the required class of workers. Minsky argued that this is why the 1960s policies resulted in inflation.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-66462182419850535782017-11-24T03:27:27.396-05:002017-11-24T03:27:27.396-05:00"Once the argument is formalised, it is uncle..."Once the argument is formalised, it is unclear whether or not there is a Job Guarantee matters; all that is needed is a lower bound for nominal after-tax wages."<br /><br />That assumes bi-directionality in the job market - for every individual there must be a matching job. Again in reality that doesn't happen - there is a list of jobs that will not match to individuals and a list of individuals that will not match to jobs and it is not price that is the problem. It is a fundamental square peg in round hole problem. <br /><br />Firms do not alter jobs infinitely to match individuals. They simply don't do the thing they were planning and let the profit vanish. Individuals however need a match to live, but cannot alter infinitely because labour is only fungible so far (you cannot turn your average dumpster diver into a brain surgeon no matter how good the training package). Similarly labour is not infinitely relocatable spatially and neither is business. <br /><br />The Job Guarantee creates the square holes in the appropriate spatial locations necessary to clear the marketNeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-84513592149581069492017-11-23T13:58:33.601-05:002017-11-23T13:58:33.601-05:00(The above comment should read “could possibly dem...(The above comment should read “could possibly demonstrate”; I will discuss that point in a later article.)Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-16756400424089202812017-11-23T13:57:17.217-05:002017-11-23T13:57:17.217-05:00This is a highly mathematical post, with analyses ...This is a highly mathematical post, with analyses a rather abstract question. How the theorem is to be applied is left to the reader to decide. For example, one could use this proof technique to demonstrate that a natural rate of interest does not exist.<br /><br />And let us imagine that a hypothetical person made an assertion that is equivalent to saying that J* exists. Under the assumption that my proof is correct, would this hypothetical person be pleased if I labelled the belief in the existence of J* the “(insert hypothetical name here) Conjecture”? I imagine not.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-86317184332694621102017-11-23T11:40:26.675-05:002017-11-23T11:40:26.675-05:00"One could imagine the following argument..&q..."One could imagine the following argument..". So you're making up an argument out of thin air and attributing it to those you don't agree with. That sounds very much like a straw man argument.<br /><br />Then comes the idea that “The variable J∗(t) cannot be affected by policy choices.” So no one is able to influence the number of people on JG??<br /><br />This really is straw man stuff.<br /><br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-20423674579067724932017-11-23T11:11:38.804-05:002017-11-23T11:11:38.804-05:00It’s a fixed law of nature; an exogenous variable....It’s a fixed law of nature; an exogenous variable. “The natural rate.” Cannot be affected by policy.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-33031714180368698272017-11-23T11:10:41.362-05:002017-11-23T11:10:41.362-05:00The math symbols did not copy well. Sorry about th...The math symbols did not copy well. Sorry about that.Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-5908830827135060852.post-9238885615335125102017-11-23T11:07:37.590-05:002017-11-23T11:07:37.590-05:00When you write "1. The variable J∗(t)J∗(t) ca...When you write "1. The variable J∗(t)J∗(t) cannot be affected by policy choices." what do you mean?<br /><br />In my understanding, a variable takes on different values. But, if the variable cannot be affected by policy choices, this variable is controlled by exogenous forces. Do you have in mind that this term represents the decision of the controlling decision maker?Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.com