‘DSGE + Financial Frictions = Macro that Works?’

This is a brief follow-up to this post from Noah Smith (see this post for the abstract to the Marco Del Negro, Marc P. Giannoni, and Frank Schorfheide paper he discusses): DSGE + financial frictions = macro that works?: In my last post, I wrote: So far, we don’t seem to have gotten a heck of a lot […]

‘The Left-Right Divide in U.S. Politics’

Dean Baker: Krugman Misrepresents the Left-Right Divide in U.S. Politics: In his contribution to the debate over whether there is a group of open-minded “reformed” conservatives, Paul Krugman misrepresents the central focus of the left-right divide in national politics. He tells readers: “Start with the proposition that there is a legitimate left-right divide in U.S. politics, built […]

‘Financial Stability Monitoring’

In order to stabilize the financial system, there are two recommendations that I would definitely make. One is to reduce the chance of runs in the shadow banking system — a key factor behind the financial crisis. As noted below, the Dodd-Frank Act “does not address structural problems in wholesale short-term funding markets, such as […]

A Response to ‘Why Politicians Ignore Economists on Austerity’

Simon Wren-Lewis: … So why are politicians, in the Netherlands and elsewhere, pursuing a policy that most economists regard as an elementary error? This was a question raised by Coen Teulings, who is the director of the CPB, the Dutch fiscal council. He was commenting on an IMF sponsored conference in Sweden, at which most economists argued […]

Ageing and Productivity in Economics

Daniel Hamermesh argues that innovation in economics is slowing, and that allows older economists to stay in the game longer than in the past: Ageing and productivity: Economists and others, by Daniel S. Hamermesh, Vox EU: Is economics still a young person’s game? If not, what is changing? This column argues that although top-level economic research […]

What Do Republicans Really Want?

My latest column begins with Eric Cantor’s call for Republicans to talk about “helping folks”: For Obama, State of the Union Means State of the People, by Mark Thoma: House Majority Leader Eric Cantor believes that Republicans must show their concern for those struggling in this economy if they want to regain their political footing. […]

King Stands by Inflation Targeting

I don’t get this argument from Bank of England governor Mervyn King: The governor of the Bank of England… Sir Mervyn King … dismissed suggestions made by his designated successor, Mark Carney, now governor of the Bank of Canada, for the Bank to ease monetary policy further by abandoning its inflation target if meaningful growth […]

Mint the Platinum Coin?

I haven’t said anything about the platinum coin option, until now, because I am of two minds about it. One part of me says this is a very bad idea. We all understand the intent of the law that would allow this, to permit commemorative coins to be minted. Do we really want leaders who […]

Prospects for the Global Economy in 2013

CFR’s A. Michael Spence thinks that 2013 augurs better for the world economy, but cautions that lagging employment and income inequality will hamper a robust recovery. In contrast, CFR’s Robert A. Kahn cautions that Europe’s debt crisis is far from being solved and that without growth, “we are likely to see Europe again at the […]