For public companies in the US, what is the breakdown by state and then by sector, as measured by market capitalization: Quite a graph. Some states are like the US Average Sector mix, and some are very different. This set of two graphs will tell the story: These are broad generalizations, but why are...
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Does it matter who controls the businesses of the country? Does it matter who regulates the businesses of the economy? Should these people be smart or dumb? One cost of the meddling that the Fed and Treasury have done through the bailouts is that dumb people are left in place. People who mismanaged their...
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As a follow-up to the post below this one on the usefulness of modern macroeconomic modes, here's Tom Sargent. Given my remarks below, I was pleased to read this: The criticism of real business cycle models and their close cousins,...
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Jean Pisani-Ferry argues that "In extraordinary times, history is, in fact, a better guide than models estimated with data from ordinary times": The Great Depression in Economic Memory, by Jean Pisani-Ferry, Commentary, Project Syndicate: The dispute that has emerged in...
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As James Bullard noted in the previous post, we "have one of the world's experts on the question of the dynamics" of dynamic stochastic general equilibrium (DSGE) models here at the University of...
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In my last post on this topic, I went over the orthodox and unorthodox monetary policy responses to the crisis in the US. Here were the orthodox options: Lower the Fed funds rate into lower positive territory. Offer language that says that the Fed Funds rate will be low for a long time. Buy...
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The conversation with Stephen Williamson continues. See here and here (including comments).Update: Brad DeLong responds to Williamson.Update: Paul Krugman comments.
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Rajiv Sethi, who I've come to trust to get things right, has a nice summary of the recent controversy over the relationship between interests rate and inflation: Lessons from the Kocherlakota Controversy, by Rajiv Sethi: In a speech last week...
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I have a post on the futility of fiscal policy coming, but the hubbub over Jackson Hole has made me alter my publishing schedule. I want to give one more shot on the idea that the Fed is out of ammunition, and that unorthodox moves are more likely to scare the public than result...
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Stephen Williamson says the reason that New Keynesian economics is popular is because of Michael Woodford's magical ability to persuade economists: This really has nothing to do with empirical evidence. ... New Keynesian economics is successful, because Mike Woodford has...
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