Month: November 2018

Creative destruction in retailing

phil magness vs. nancy maclean: a knockout punch?

James Buchanan is not really that well known among economists. He is a boring speaker and a dense writer.

Milton Friedman will be turning in his grave if he discovered that all that work he put into newspapers and TV was a waste of time because James Buchanan was secretly running everything from his desk by doing nothing

nutter home school photo sept 1958 found by magness.jpgParents in Virginia continued to hold classes after segregationists successfully closed public schools. In September 1958,  UPI circulated this story about Virginia parents who opposed segregation and continued to hold classes in the home of economist Warren Nutter.

Nancy MacLean’s book, Democracy in Chains, on James Buchanan and public choice makes a very disturbing claim. Namely, that James Buchanan, and other public choice scholars, were aligned with segregationists. If true, this is very important to know. But if it is false, the record needs to be cleared up. Immediately.

Phil Magness has been on a year long mission to verify and critique MacLean’s book. More so than any other critic, Magness has spent hour after hour hunting down sources and finding  new materials. In case after case, he finds errors. Some minor, some egregious. Phil recently announced that he’s found direct evidence that one of MacLean’s major historical claims…

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Inflation-indexed bonds: are they telling us anything?

croaking cassandra

Data from New Zealand’s inflation-indexed bond market has been a bit of a mystery for some time.

If one looks at US data, the gap between conventional and indexed government bond yields –  the “breakeven” or implied inflation expectation – makes sense.  Here is the data for the last five years or so.


The US inflation target is around 2 per cent and for the last couple of years the breakevens have been pretty close to that.  There was a period of real weakness in 2015/16 but it didn’t last that long, and even then the breakevens were only averaging around 1.5 per cent.   If you were inclined to focus on the severe limitations US monetary policy will face in the next serious recession, you might even think 2 per cent breakevens for the average of the next 10 years is a bit high –  after all, the Fed…

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