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2013

Central Bank Asset Purchases And Its Connection To Tobin’s Theory Of Asset Allocation

15 May 2013

Recently, Martin Feldstein wrote a WSJ article Martin Feldstein: The Federal Reserve’s Policy Dead End with a subheading summary “Quantitative easing hasn’t led to faster growth. A better recovery depends on the White House and Congress”. This has led to various dubious debunking such as “Feldstein doesn’t understand how QE works”. In the following (although I am [...]

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Gattopardo Economics

14 May 2013

Here is a nice new working paper by Thomas Palley titled Gattopardo economics: The Crisis And The Mainstream Response Of Change That Keeps Things The Same. From the introduction: Il Gattopardo (The Leopard) is a sweeping movie, based on the novel by Giuseppe Tomasi di Lampedusa, about social tumult and class conflict in Sicily in the 1860s. [...]

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Endogeneity, Exogenous, Et Cetera

4 May 2013

Louis-Philippe Rochon and Sergio Rossi have a very interesting article Endogenous Money: The Evolutionary Versus Revolutionary Views in the Review Of Keynesian Economics. I think it was written many years back and was in an unpublished form and has been published now. It is a nice critique of views of some Post-Keynesians such as Victoria Chick and also [...]

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Erroneous Use Of The Sectoral Balances Identity [Updated]

2 May 2013

Andrew Lilico of The Telegraph takes issue with the arguments presented using the sectoral balances identity. The website describes him as: Andrew Lilico is an Economist with Europe Economics, and a member of the Shadow Monetary Policy Committee. He was formerly the Chief Economist of Policy Exchange. After interpreting the accounting identities in his own way, [...]

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Nicholas Kaldor On Floating Exchange Rates

25 April 2013

Martin Wolf has a nice new column on imbalances creating troubles for the UK economy in the Financial Times: What a floating currency gives and what it does not. Why are current account deficits a haemorrhage in the flow of circular income? Weak external trade performance implies a drain in demand and hence pressure on the [...]

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Thomas Herndon!

24 April 2013

So Comedy Central had a nice show on the Reinhart-Rogoff episode and how their work was used to drive world-wide austerity. The show featured Thomas Herndon – the graduate student from the University of Massachusetts Amherst who found errors in R&R’s work. Great work Thomas! Worth a watch: (Click the two pictures to watch the videos [...]

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United States To Adopt The 2008 SNA

22 April 2013

There are two interesting articles in the Financial Times today: Data shift to lift US economy 3% and US economy gets a Hollywood makeover According to the first article, The revision, equivalent to adding a country as big as Belgium to the estimated size of the world economy, will make the US one of the first adopters [...]

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Games Economists Play

21 April 2013

The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists. – Joan Robinson, 1955, “Marx, Marshall And Keynes”, Occasional Paper No. 9, The Delhi School of Economics, University Of Delhi, Delhi. It is fun to watch what economists have to say after [...]

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Euro Area Current Account Balances

17 April 2013

Always helps to look at actual data and remember it. From the IMF’s latest World Economic Outlook: (click to expand) Far away from rebalancing!

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Margaret Thatcher’s Gigantic Con Trick

8 April 2013

There have been too many praises for Mrs Thatcher after her death today. Wynne Godley once described the Thatcher “miracle” as a gigantic con-trick. Here is from a newspaper article: I regard the Thatcher miracle as a gigantic con-trick. Almost every major indicator – output, unemployment, industrial investment, and the balance of payments has performed [...]

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