Category Archives: economics

An ambitious list of respondents

Strictly obiter

Clements Hmmmmm…

Which can be represented pictorially as…

Brainmeme My brain hurts

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.@NZTreasury wined, dined GFC prophet @ProfSteveKeen: his Oz data predicted GFC but missed long boom @Chris_Auld @dandolfa

Post-Keynesian macroeconomists believe business cycle theory starts and finishes with recurrent private debt bubbles that lead to inevitable financial crashes because private investors repeatedly borrow more than they can pay back and never learn.

minsky-moment-768x512

Bold, risky science in the finest tradition of Karl Popper. Keen strictly forbids a recession not following a build up of private debt. His theory is to bareboned to have a protective belt of auxiliary hypotheses that save him from refutation.

Post-Keynesians identified a great business opportunity shorting these recurrent debt bubbles but must crowd source further development of the Minsky Software that successfully predicted the GFC. Top hedge fund managers earn at least $400 million a year so they could easily spare a few million dollars over lunch on the off chance that there is something in Post-Keynesian macroeconomics and the Minsky software.

IPCC Freakonomics

Science Matters

The latest unguided missile IPCC report came out of a South Korea meeting, and surprisingly the first media response was silence. Could it be some of them actually considered that these new claims and demands are so over the top that their audiences will guffaw and break with their media masters once and for all?

The graph illustrates the problem very clearly. Since 1992, the UN Framework Convention on Climate Change has met 23 times. These UNFCCC discussions have utterly failed to reduce CO2 emissions. Yet from 2020, emissions have to drop dramatically, if we are to stand a chance of keeping global warming below 1.5°C.

According to IPCC SR15 this will require an annual average investment of around US$2.4 trillion (at 2010 prices) between 2016 and 2035, representing approximately 2.5% of global gross domestic product (GDP). The cost of inaction and delay, however, will be many times greater. (sic). …

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PC culture on the wane?

Why Evolution Is True

Well, I don’t know if it’s really on the wane, but it seems to be a lot less pervasive than most people think. According to a new article in The Atlantic by Yascha Mounk (screenshot below), based on a new study by an organization called More In Common (click on green screenshot below, and see pdf here), fully 80% of Americans think that “political correctness is a problem in our country.” First, though a bit about the author and the study, both of whom seem to be on the liberal side.

Yascha Mounk is described on his own website as “one of the world’s leading experts on the crisis of liberal democracy and the rise of populism. The author of three books, he is a Lecturer on Government at Harvard University, a Senior Fellow at New America, a columnist at Slate, and the host of The Good Fight podcast.”

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Distributional Effects of Monetary Policy: An Opportunity for Austrian Economics

ThinkMarkets

by Sebastian Müller

For a long time, Austrian macro had a unique selling point in what might be called the ‘money matters’ view: referring to the notion that changes in the money supply by their very nature can never be said to be neutral. Yeager (1997) and Horwitz (2000) describe the Austrian stance as a “fluttering veil”. On the one hand, it incorporates the belief that prosperity cannot be generated through an expansion of the money supply in the long-run (long-run neutrality of money). On the other hand, changes in the money supply have real effects (short-run non-neutrality).

This proposition can be traced back to the works of classical economists such as Hume (1970), Mill (1909), Cairnes (1873), and Cantillon (1755).[i] In his essay on economic theory, Cantillon (1755) points out that an expansion of the money supply necessarily entails distributional effects as first receivers of the newly…

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