Redacted Version of the January 2012 FOMC Statement
December 2011 January 2012 Comments Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding some apparent slowing in global growth. Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global...
On Financial Intermediation
I appreciate Steve Randy Waldman, who writes the excellent blog Interfluidity. Even before I started blogging, while I was at RealMoney, we interacted over CPDOs, along with Alea, and several others that were onto the scam. That was a fun time, because aside from the Canadian rating agency Dominion, there was no one else questioning...
The Rules, Part XXX (30)
In the recent run-up, there was talk of the infallibility of equities. This led to a higher level of variable compensation in the economy through option and share issuance and low pressure to raise fixed wages. This was yet another form of hidden leverage, which hid the unprofitability of enterprises through share dilution. That was...
The Rules, Part XXIX
Risk premiums should never be capitalized, they should only be taken into income as earned. This may end up being another odd post of mine. I’m going to start writing about bank regulation, but I will end up talking about monetary policy. There are many people who hate the rating agencies. They hate them because...
On Predicting the Future, Redux
From a reader, ptuomov: If you run a regression of the magenta line on variables that have similar trends, you will get a spuriously high R2. I think you should try to explain the weekly changes in the magenta series instead. (I may have misunderstood you regression, in which case please show the actual data...
Recent Tweets
Definitely, just followed and added 2 RSS RT @tylercowen: Sober Look is an underrated, underdiscussed economics blog, http://t.co/aewQejQX Jan 17, 2012 DOL Makes Nice on Investment Advice http://t.co/1PDeFbDg Offers defined contribution plan sponsors new options 4 participant invt advice $$ Jan 17, 2012 How will the world live with $100 oil? http://t.co/xW7LofrK Demand destruction begins...
On Predicting the Future
I’ve long admired ECRI for their timely and accurate forecasts, and their willingness to stick by their models when things don’t seem to be immediately going their way. I have also appreciated their lack of willingness to divulge their model elements; my thoughts were, “Hey, it’s probably a simple model that no one has ever...
Too Many Par Claims versus Sub-Par Assets
The world is a maze of debt. Debts layered on debts. The Earth and its productivity is roughly the same or better than prior years. What is the problem with the economy then? The problem is this: there are entities that made bad loans in the past that expect to be paid back in full. ...
"Ideology and Demand Denial"
Simon Wren-Lewis on ideology and demand denial (I agree with his comments on the "asymmetry" in the views of Keynesian and non-Keynesian economists, and that in many cases ideology is the likely explanation for the differnece): Ideology and Demand Denial,...
Recent Tweets
Turkey Said to Tell India Help on Iran Oil Payments May End http://t.co/smdFrxQK Lot of second order effects from the Iran embargo. $$ Jan 10, 2012 EU Is Said to Consider Iran Oil-Embargo Exemptions Rather Than Blanket Ban http://t.co/12qgDjBD Mainly to help Greece, Italy & ENI $E $$ Jan 10, 2012 @D_T_A_F Well, they’ve been...
Simon Wren-Lewis: Mistakes and Ideology in Macroeconomics
Via Chris Dillow, this is Simon Wren-Lewis of Oxford University: Mistakes and Ideology in Macroeconomics, by Simon Wren-Lewis: Imagine a Nobel Prize winner in physics, who in public debate makes elementary errors that would embarrass a good undergraduate. Now imagine...
"Mechanisms vs Models"
I need to think about this more before signing onto or rejecting this argument, but here is Chris Dillow's response to the post above this one (and it provides a nice complement to the post that follows by Dan Little):...
