Month: March 2012
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Lending, Velocity, and Aggregate Demand
JKH likes this line in Keen’s response to Krugman: The endogenous increase in the stock of money caused by the banking sector creating new money is a far larger determinant of changes in aggregate demand than changes in the velocity of an unchanging stock of money.” It struck me as an empirical question: how do…
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Keen Answers Krugman
I think Steve handles it admirably, and admirably briefly, so in this case I’ll simply point you over there. On bank lending’s creating deposits and Paul Krugman’s response | Credit Writedowns. Cross-posted at Angry Bear. Related posts: Defining “Reserves” The Central Flaw in Krugman’s Argument Against Keen One Place Where Mankiw Makes Absolutely No Sense…
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The Central Flaw in Krugman’s Argument Against Keen
The key failing in Krugman’s response to Steve Keen’s response to Krugman’s paper (PDF) is here: If I decide to cut back on my spending and stash the funds in a bank, which lends them out to someone else, this doesn’t have to represent a net increase in demand. Krugman assumes here that people have to save (spend…
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Steve Keen Flexes His Muscles
Super Corporate Heroes: Truth, Justice, and How Much Does It Pay? Related posts: How Corporations Became People The Real Delegate Count: Ignoring the Super(fluous) Delegates Is Honesty a Conservative Moral Value? S&P 500 Earnings: The Most Depressing Graphic I’ve Seen This Year Why Libs and Cons Should All Love Milton Friedman’s Corporate Tax Proposal
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Thinking About the Fed
JKH has magisterial post up on the recent dust-up over Saving as perceived in various sectoral models — one-sector (global, for instance, or government- and trade-balanced domestic private sector); two-sector (government and private including international); the most common MMT construct, the three-sector model (government, domestic private, and international); the rather uncommon four-sector model (government, international,…
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It’s a Spending Problem, Right?
Well if so (something I’m not asserting), it’s a Republican spending problem: Economist’s View: Per Capita Government Spending by President. Cross-posted at Angry Bear. Related posts: Saving and “Government Saving” You Gotta Give Reagan Credit Rules? In Knife Fight?! Now (Also) Blogging at Angry Bear Why Economists Don’t Understand Accounting, or Business
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When Do Humans Want to Share the Wealth?
Jonathan Haidt reports an interesting experimental result: Two three-year-olds walk up to a marble-delivery machine that has two bins. Each stands in front of one bin. Three scenarios: 1. One bin has three marbles in it, the other has one: the winner is unlikely to share to equalize the takings. 2. There are two ropes…
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Business Roundtable Proposes Obamacare to Restore American Competitiveness
Or: You Just Can’t Make This Shit Up “Health Care Costs Put U.S. at Significant Disadvantage Compared with Global Competitors” I’ll let you read the details, but short story: Whodathunkit? And what do they recommend? Creating greater consumer value in the health care marketplace by using health information technology and empowering consumers with more information…
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Note to ‘Pubs: The Demographic Tidal Wave is Hitting the Beach
Or: Even a Stopped Clock is Right, Eventually For quite a while I’ve been explaining the rabid, frantic vehemence of tea partiers and Republicans in general with a single visualization: They’ve got their backs against the seawall, and a massive, overwhelming demographic tidal wave is looming over them. The terror that situation provokes among old, white,…
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Where’s the High Point on the Laffer Curve? And Where Are We?
Anti-taxers love to haul out the legendary napkin-inscribed Laffer curve to demonstrate that lower taxes would yield more government revenue. But this ploy only works because they assume that we’re at or past the high point — that higher taxes would move us down the right slope. (Note the cross-marks-the-spot in the image here?) But where…
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More on Interest on Reserves
I did a couple of posts a while back asking (and concluding) what would result from the Fed ending their interest on reserves policies. (Not suggesting they do so — just wondering what the effects of that one change would be.) I got a lot of good answers and discussion, but nobody mentioned the very…