In a recent post, John Cochrane, responding to an earlier post by Nick Rowe about Neo-Fisherism, has tried to explain why raising interest rates could plausibly cause inflation to rise and reducing interest rates could plausibly cause inflation to fall, even though almost everyone, including central bankers, seems to think that when central banks raise interest rates, inflation falls, and when they reduce interest rates, inflation goes up.
In his explanation, Cochrane concedes that there is an immediate short-term tendency for increased interest rates to reduce inflation and for reduced interest rates to raise inflation, but he also argues that these effects (liquidity effects in Keynesian terminology) are transitory and would be dominated by the Fisher effects if the central bank committed itself to a permanent change in its interest-rate target. Of course, the proviso that the central bank commit itself to a permanent interest-rate peg is a pretty…
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The week before last, Noah Smith wrote a post “The Neo-Fisherite Rebellion” discussing, rather sympathetically I thought, the contrarian school of monetary thought emerging from the Great American Heartland, according to which, notwithstanding everything monetary economists since Henry Thornton have taught, high interest rates are inflationary and low interest rates deflationary. This view of the relationship between interest rates and inflation was advanced (but later retracted) by Narayana Kocherlakota, President of the Minneapolis Fed in a 2010 lecture, and was embraced and expounded with increased steadfastness by Stephen Williamson of Washington University in St. Louis and the St. Louis Fed in at least one working paper and in a series of posts over the past five or six months (e.g. here, here and here). And John Cochrane of the University of Chicago has picked up on the idea as well in two recent blog posts (here
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“Modern Monetary Theory,” a doctrine about fiat money, has captured the attention of some reformers and progressives. This doctrine – a set of propositions contrary to logic and evidence – purports to explain why the US and other economies are ailing, but is beset by contradictions with the historic facts and within the doctrine.
For example, The New Inquiry on 11 April 2014 featured an article by Rebecca Rojer on “The World According to Modern Monetary Theory.” The author regards it as a revelation of MMT that the “rules of money are not immutable laws of nature.” Since the science of economics explains the effects of incentives and decisions, evidently these money “rules” are the outcomes of private and governmental decisions, and since the effects are not immutable laws, people can arbitrarily create whatever outcomes they wish. That would indeed be wonderful, to just print money are thereby eliminate unemployment…
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Sydney Harbour Sea Levels 1886-2018 | CLIMATISM
“CLIMATE alarmism is a gigantic fraud:
it only survives by suppressing dissent and by spending
tens of billions of dollars of public money
every year on pseudo-scientific propaganda.”
– Leo Goldstein
SEA-LEVEL RISE alarmism is just one in a long line of propaganda tools used by the Climate Crisis Industry to promote the narrative that human CO2 emissions are causing dangerous
global warming climate change.
VERY little of the carefully orchestrated fear-mongering is based on observed reality and empirical evidence, rather, worst-case climate model scenarios pushed into the unaccountable future, designed to scare you and policy makers into (costly) “climate action now!”.
SEA level alarmism holds significant implications for the public who bear the burden of carbon-dioxide related taxes. Those living within coastal areas, constrained by further punitive imposts as insurance companies exploit the climate of fear for their own profit.
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STT will keep smashing the line about giant batteries overcoming the chaotic delivery of wind and solar, while RE zealots keep pushing it.
Over recent posts we focused on the insane cost and limited capacity of giant lithium-ion batteries of the kind peddled by reefer-smoking Californian carpetbagger, Elon Musk (see above and our post here).
In this post, we hand over to Jack Ponton for a dissertation on the whole range of purported storage methods claimed by those peddling wind and solar as solutions to the hopeless intermittency of wind and solar.
Jack Ponton is Emeritus Professor of Engineering at the University of Edinburgh, a fellow of the Royal Academy of Engineering and of the Institution of Chemical Engineers (of which he is a past vice-president). His main research work was in mathematical modelling of complex engineering phenomena and software development. He has also worked in and with the chemical industry on a…
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