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The unfortunate uselessness of most ’state of the art’ academic monetary economics
Standard macroeconomic theory did not help foresee the crisis, nor has it helped understand it or craft solutions. This columns argues that both the New Classical and New Keynesian complete markets macroeconomic theories not only did not…
The Civil War in Macroeconomics
In principle I think Krugman is right to have a go at micro foundations. I have criticised the concept myself for ignoring the potential for research paradigms that are purely macroeconomic in nature. In this sense, the fact that Krugman…
What is the labor participation rate telling us?
There is no question that labor force participation in the US has been falling as more people drop out of the workforce. But that measure could be misleading because as the population ages, the workforce will shrink naturally. Perhaps a…
The Eurozone, Germany and the ECB’s interest rates
Solving Germany's investment problem requires both low interest rates and increased government investment. The ECB is at least attempting to address the first of these. But when is the German government going to accept its responsibility…
On the juxtaposition of positve economic growth and market vulnerability
It was interesting to see the US markets follow through yesterday to the upside after a monster rally in shares when the Fed tapered large scale asset purchases on Wednesday. But rather than seeing strength in this, I see vulnerability…
Monetary policy under financial repression
In order to understand much of what is happening in China it is important to understand how financial systems operate under condition of financial repression. Because most of what we know about economics is derived from economists whose…
Why the Fed tapered asset purchases
Yesterday, the FOMC decided to reduce the pace of its large scale asset purchase program from $85 billion per month to $75 billion per month. The Fed has long wanted to taper its LSAP program and move to forward guidance to normalize policy…