Meta tags:
Headings (most frequently used words):
2012, february, the, debt, and, of, money, fcm, jw, mason, wednesday, tuesday, monday, sunday, factor, cost, with, new, arthurian, economics, google, saturday, friday, thursday, 19, plus, it, private, estimating, my, for, accumulation, translate, blog, archive, links, labels, 29, 28, 27, 26, 25, 24, 23, 22, 21, 20, 18, 17, 16, 15, 14, 13, 12, ça, change, est, la, même, chose, long, view, macroeconomic, miracle, pair, fedfunds, rate, further, review, friedman, did, strawberries, smoke, mirror, smokin, gun, microbes, everyday, wife, bakes, dogs, see, micro, because, is, stock, what, context, birthday, war, on, continues, confusion, nightmare, fisher, dynamics, in, household, encumbered, productive, argument, touch, irony, wealth, shock, bleak, apologists, improved, docs, spreadsheet, charts, alan, krueger, rise, consequences, inequality, dancing, steve, fallacy, composition, all, hills, valleys, follow, update, 44, am,
Text of the page (most frequently used words):
the (829), and (289), debt (267), that (205), for (110), money (105), not (81), but (79), interest (71), cost (63), from (62), was (61), with (61), inflation (60), income (59), growth (57), you (54), problem (53), this (51), federal (50), rate (47), have (40), graph (40), private (39), productivity (38), can (36), gdp (36), has (36), economy (34), like (33), what (32), bullard (32), two (31), policy (31), arthurian (30), february (29), years (28), than (28), factor (28), demand (28), economic (28), 2012 (28), comments (27), posted (27), more (27), would (27), all (26), use (26), because (26), fcm (26), total (25), are (25), then (25), there (25), government (25), only (24), get (24), output (23), one (23), don (23), level (22), say (22), good (22), average (22), keen (21), says (21), see (21), excessive (21), when (21), after (21), will (21), bank (20), been (20), some (19), were (19), relative (19), same (19), potential (19), wealth (19), too (19), they (19), mason (19), again (18), costs (18), its (18), central (18), other (17), his (17), post (17), which (17), think (17), period (17), credit (17), increase (16), time (16), change (16), prices (16), new (16), shock (16), our (16), rates (16), spending (16), age (15), between (15), just (15), things (15), lower (15), percent (15), recession (15), should (15), had (14), view (14), back (14), also (14), how (14), pay (14), now (14), push (14), part (14), sector (14), here (13), maybe (13), out (13), look (13), ratio (13), down (13), crisis (13), them (13), google (13), january (13), into (13), data (13), wages (13), leverage (12), since (12), rather (12), about (12), long (12), much (12), labels (12), people (12), andolfatto (12), their (12), line (12), took (12), may (12), quantity (12), early (12), pair (12), def (12), fred (11), 2007 (11), great (11), those (11), thought (11), enough (11), borrowing (11), bubble (11), economists (11), gap (11), less (11), household (11), 1970s (11), over (11), hand (11), august (11), golden (11), numbers (11), series (11), fed (10), aggregate (10), way (10), both (10), well (10), june (10), might (10), economics (10), docs (10), better (10), above (10), target (10), price (10), krugman (10), let (10), got (10), such (10), per (10), dollar (10), year (10), 1980 (10), page (10), share (10), october (10), fedfunds (10), sumner (10), graphs (9), matter (9), saying (9), actually (9), still (9), created (9), end (9), does (9), macroeconomic (9), right (9), blue (9), else (9), yes (9), 1973 (9), tax (9), corporate (9), micro (9), number (9), march (9), april (9), july (9), september (9), november (9), december (9), make (8), reading (8), doesn (8), words (8), said (8), however (8), seems (8), around (8), wrong (8), productive (8), rise (8), means (8), financial (8), example (8), red (8), whole (8), analysis (8), paper (8), makes (8), amount (8), trend (8), take (8), could (8), sense (8), off (8), know (8), want (8), something (8), 2004 (8), changes (8), shows (8), world (7), difference (7), concern (7), always (7), 1965 (7), through (7), accumulation (7), increasing (7), did (7), spreadsheet (7), where (7), ought (7), before (7), today (7), housing (7), measures (7), point (7), higher (7), must (7), everybody (7), paying (7), reduced (7), even (7), really (7), argument (7), figure (7), find (7), given (7), slow (7), free (7), owed (7), increased (7), fisher (7), pdf (7), units (7), stock (7), proxy (7), outlays (7), getting (6), war (6), matters (6), thinking (6), speculation (6), investment (6), faster (6), any (6), your (6), create (6), jim (6), sure (6), late (6), expect (6), four (6), charts (6), set (6), who (6), james (6), bounce (6), most (6), probably (6), being (6), why (6), another (6), context (6), market (6), consumption (6), support (6), fact (6), looking (6), story (6), fixed (6), started (6), solution (6), estimate (6), unemployment (6), need (6), friedman (6), keep (6), each (6), role (6), 1947 (6), many (6), low (6), quite (6), gold (6), encumbered (6), paid (6), reduce (6), dynamics (6), public (6), file (6), 14b (6), 10b (6), miracle (6), louis (5), reserve (5), steve (5), notion (5), anyway (5), very (5), read (5), high (5), recent (5), concerned (5), issue (5), went (5), 1966 (5), nothing (5), grow (5), cycle (5), without (5), capacity (5), finance (5), mid (5), first (5), non (5), these (5), version (5), thing (5), earthquake (5), true (5), david (5), conventional (5), factors (5), measure (5), important (5), robert (5), likely (5), negative (5), monetary (5), close (5), large (5), real (5), different (5), times (5), yeah (5), though (5), suddenly (5), buy (5), falling (5), start (5), solve (5), accept (5), few (5), milton (5), call (5), supply (5), rising (5), gross (5), kahn (5), rich (5), cannot (5), 1995 (5), half (5), burden (5), essentially (5), compared (5), 1980s (5), focus (5), decades (5), 2011 (5), never (5), lenders (5), macro (5), sources (5), net (5), moderation (5), source (5), annual (5), strawberries (5), millions (5), together (5), him (4), posts (4), sudden (4), put (4), exactly (4), results (4), coming (4), speculative (4), regarding (4), accumulating (4), problems (4), performance (4), affects (4), ignores (4), consequences (4), blog (4), sunday (4), economist (4), expectations (4), normal (4), didn (4), stop (4), trying (4), slumping (4), special (4), bleak (4), anything (4), next (4), official (4), business (4), zero (4), effect (4), 2009 (4), led (4), lot (4), ends (4), left (4), interesting (4), idea (4), able (4), keynesian (4), already (4), ways (4), mess (4), result (4), place (4), somehow (4), parts (4), stuff (4), middle (4), argue (4), ever (4), links (4), john (4), thus (4), guess (4), three (4), 1970 (4), policymakers (4), 1990s (4), 2000s (4), quarter (4), second (4), promise (4), give (4), passed (4), profits (4), contrast (4), base (4), course (4), using (4), solved (4), until (4), 2000 (4), used (4), sometimes (4), pretty (4), blame (4), deduction (4), pages (4), couldn (4), surprise (4), individual (4), volatility (4), sophisticated (4), link (4), composition (4), estimating (4), five (4), denominator (4), based (4), variable (4), billions (4), moving (4), bls (4), plus (4), 2016 (3), lead (3), deleveraging (3), decline (3), depression (3), far (3), apart (3), changed (3), wrote (3), general (3), rises (3), except (3), update (3), wait (3), 1962 (3), feedback (3), 2010 (3), explanation (3), suggests (3), added (3), driven (3), case (3), approach (3), chart (3), taylor (3), show (3), circumstances (3), meet (3), talk (3), overestimating (3), made (3), major (3), weak (3), explain (3), headwinds (3), open (3), influence (3), current (3), future (3), shift (3), 2008 (3), expectation (3), rapidly (3), comes (3), happened (3), slower (3), clear (3), leads (3), due (3), effects (3), side (3), going (3), deficient (3), insufficient (3), doing (3), dismiss (3), bigger (3), deal (3), recently (3), growing (3), trouble (3), goods (3), exceeds (3), respond (3), cause (3), wish (3), seem (3), short (3), article (3), done (3), work (3), truth (3), existing (3), modern (3), domestic (3), banks (3), nominal (3), mitchell (3), life (3), production (3), baker (3), schmitt (3), attention (3), sharp (3), dates (3), comparison (3), similar (3), rest (3), trends (3), policies (3), meanwhile (3), curve (3), slowdown (3), least (3), goes (3), run (3), news (3), nearly (3), latest (3), model (3), century (3), accelerated (3), returning (3), dropped (3), touch (3), monday (3), days (3), word (3), types (3), loan (3), spend (3), becomes (3), reason (3), activity (3), split (3), tuesday (3), continued (3), print (3), deleverage (3), stand (3), prior (3), forget (3), came (3), stagflation (3), adjustment (3), creditors (3), longer (3), assets (3), recovery (3), while (3), wednesday (3), often (3), birthday (3), jerry (3), borrow (3), accumulate (3), history (3), hill (3), payments (3), deductible (3), forty (3), era (3), below (3), continues (3), looks (3), every (3), false (3), sum (3), either (3), continuing (3), saga (3), gonna (3), initial (3), typically (3), everyday (3), josh (3), hendrickson (3), smaller (3), little (3), reduction (3), easy (3), info (3), assuming (3), available (3), peak (3), funds (3), historical (3), calling (3), figured (3), tcmdo (3), quick (3), almost (3), microbes (3), numerator (3), smoke (3), fallacy (3), community (3), pays (3), lowball (3), review (3), labor (3), image (3), plan (3), bad (3), 2013 (3), timeline (3), appear (2), http (2), org (2), friends (2), older (2), newer (2), avoid (2), identifies (2), provides (2), showing (2), followed (2), mostly (2), explained (2), unproductive (2), specifically (2), suggest (2), bejabbered (2), influences (2), sees (2), question (2), mind (2), jazz (2), 1968 (2), 1982 (2), roughly (2), finances (2), causes (2), incomes (2), forward (2), virtuous (2), asset (2), encourages (2), primary (2), kind (2), eventually (2), host (2), overstated (2), thinks (2), professional (2), heed (2), indicators (2), surely (2), dominant (2), known (2), neoclassical (2), completely (2), distribution (2), impacts (2), priori (2), grounds (2), dancing (2), click (2), full (2), screen (2), house (2), inequality (2), united (2), states (2), alan (2), krueger (2), size (2), improved (2), collapsed (2), writes (2), perhaps (2), apply (2), unsustainable (2), magnificent (2), boom (2), despite (2), stimulus (2), provided (2), wants (2), treat (2), 2001 (2), agree (2), brushes (2), aside (2), opening (2), feb (2), targeting (2), headline (2), pce (2), step (2), explicit (2), numerical (2), weakest (2), postwar (2), along (2), permanent (2), called (2), actual (2), speech (2), appropriate (2), lowers (2), ordinary (2), neither (2), nor (2), apologists (2), follows (2), mine (2), tell (2), slowly (2), simultaneously (2), double (2), rule (2), achieve (2), constant (2), encourage (2), jobs (2), views (2), arises (2), drop (2), undermine (2), pull (2), isn (2), concept (2), perfect (2), nice (2), order (2), disagreement (2), pulls (2), itself (2), convince (2), happens (2), stretch (2), shrink (2), mandate (2), stable (2), failed (2), position (2), monetarists (2), allowed (2), expand (2), allow (2), continue (2), creating (2), against (2), increases (2), services (2), pooh (2), release (2), inflationary (2), talking (2), accepting (2), burst (2), reduces (2), hence (2), dean (2), offers (2), reaffirm (2), follow (2), theory (2), mean (2), attribute (2), widely (2), later (2), date (2), digit (2), sustainable (2), following (2), resurgence (2), strong (2), tracking (2), indicates (2), returned (2), beginning (2), dropping (2), reminiscent (2), sharply (2), irony (2), turn (2), heavy (2), ralph (2), absolutely (2), anyone (2), exchange (2), creates (2), commercial (2), nobody (2), once (2), practical (2), versions (2), inhibits (2), provide (2), standards (2), expanding (2), abstract (2), 1960s (2), 70s (2), burdens (2), instead (2), necessary (2), observation (2), mmt (2), dpd (2), massive (2), society (2), bottom (2), households (2), fight (2), tradeoff (2), solomon (2), fully (2), oops (2), okay (2), unencumbered (2), liabilities (2), accidental (2), risky (2), leaving (2), falls (2), outside (2), liquidity (2), consider (2), evolution (2), fall (2), scale (2), 1950s (2), slack (2), tim (2), duy (2), president (2), considered (2), art (2), focused (2), soon (2), confusion (2), thursday (2), fighting (2), illegal (2), drugs (2), drug (2), trade (2), become (2), hills (2), valleys (2), businesses (2), deduct (2), employees (2), expense (2), decade (2), reagan (2), includes (2), basically (2), death (2), portion (2), compensation (2), making (2), unavailable (2), reported (2), come (2), sheet (2), linked (2), comment (2), 2015 (2), displayed (2), captures (2), sheet1 (2), generated (2), friday (2), understanding (2), multiple (2), minor (2), somebody (2), repaid (2), prefer (2), repay (2), prefers (2), limits (2), worth (2), questions (2), edit (2), 2014 (2), saturday (2), wife (2), bakes (2), dogs (2), guy (2), luck (2), written (2), prevent (2), potentially (2), hard (2), site (2), download (2), table (2), bar (2), tables (2), worked (2), bit (2), compare (2), similarity (2), yesterday (2), relation (2), exist (2), worse (2), ngdp (2), hinders (2), cpi (2), needed (2), lowest (2), mirror (2), smokin (2), gun (2), demanded (2), opposite (2), billion (2), last (2), held (2), social (2), security (2), administration (2), fyoint (2), anybody (2), further (2), move (2), accumulated (2), 2002 (2), plotted (2), evaluating (2), ask (2), examine (2), strengths (2), basis (2), hodrick (2), prescott (2), smoothing (2), 100 (2), www (2), technology (2), working (2), ago (2), old (2), live (2), website (2), dividend (2), est (2), même (2), chose (2), 2018 (2), taxes (2), loops (2), laffer (2), banking (2), civilization (2), repayment (2), dave (2), ross (2), translate (2), html (2), blogger (2), venn (2), rights, reserved, courtesy, research, stlouisfed, fred2, horse, water, drink, stay, thirsty, subscribe, atom, home, difficult, dramatic, compares, objects, composed, references, excessively, arguing, otherwise, remains, remarks, arise, fails, check, item, sidebar, 1969, 1972, equivalent, amiss, mainly, moves, gives, vicious, positive, process, grand, adds, funded, 13th, blindly, optimistic, label, servicing, stage, falter, serious, ensue, superficially, 80s, financed, debtwatch, arrows, icon, corner, presentations, white, whitehouse, lots, formatting, options, font, title, big, huge, improvement, thanks, path, gets, boss, cochrane, realistic, evaluation, expecting, lowering, proceeds, evenly, distributed, fair, overestimate, yet, observes, bubbly, god, ready, statement, implies, jack, tamp, running, somewhat, meeting, committee, fomc, naming, measured, personal, expenditures, index, ended, brenner, backbone, persuasive, evaporated, crash, viewed, highly, persistent, implication, greatly, takes, keeping, worries, experienced, amounts, 1981, catches, rubber, band, supposed, rapid, analysts, summer, concerning, inhibiting, puts, play, simply, grows, land, closer, produce, myself, direct, clever, rubbing, nose, own, poo, tells, inadequate, according, remember, wouldn, unless, pushing, curtail, certainly, needs, whammy, hanging, arguments, bide, jump, conclusions, fail, doublespeak, pointed, chasing, billy, caused, lines, admit, crippled, realize, wikipedia, reverse, excellent, sides, reversed, expresses, works, offered, pathetic, drives, cover, accompany, shrinks, dual, decides, safe, road, compromising, opted, alternative, fix, root, monetarist, cooperating, keynesians, industrial, product, governments, anna, terms, press, ecb, main, stability, bill, empirical, closely, depend, primarily, buying, attempted, bursting, deceleration, summarizing, observe, indeed, termination, noted, goldenness, expands, refers, permits, commensurate, gains, strength, correct, analogy, events, wars, structural, elsewhere, anywhere, reliance, nowhere, wearing, blindfolds, swinging, sticks, hit, simple, believed, difficulty, detecting, contributed, significantly, instability, unaware, approximately, resulted, wisdom, setting, generally, ingredient, clarification, snippet, paragraph, reaffirmed, capitalism, averaged, nosedive, ralphonomics, iou, taken, taking, defines, add, twin, creation, borrowed, circulate, stays, borrower, separated, indistinguishable, define, indicator, unnecessary, letting, accomplish, living, improve, obligation, numerous, categories, type, categorisation, consists, holder, indebtedness, introduces, arjun, jayadev, study, unfortunately, suppression, deleterious, impossible, remain, sticking, resumes, quote, ignoring, mmmm, kicking, expansion, congress, treasury, bicker, forever, amen, stick, confirming, knew, consequence, consciously, purpose, return, arose, complement, invent, tales, regulation, splitting, baby, answer, dealt, separate, environment, usual, saw, discussion, 1929, mistake, forms, remove, rescue, byproduct, efforts, rescuing, debtors, hang, tatters, please, note, temporary, emergency, enables, scope, successfully, 1940s, motivation, constraints, fragility, isolation, condition, acceptable, absence, substantial, forgiveness, form, unavoidable, encouraged, remained, wire, graciously, responded, enjoy, drawing, fear, day, access, disabled, seeking, alpha, mare, night, eyes, happy, son, occasionally, stem, convinced, wither, away, letter, starts, cut, lending, borrowers, ride, global, easier, conveys, corporations, attitude, taxable, boost, begins, encompasses, deductions, fell, absorbed, salaries, starting, wage, spiral, developed, copy, interactive, stuck, empty, rectangles, components, sheet7, eat, employee, unlimited, originated, 1918, opens, coverage, leviathan, encounters, plays, inbreeding, urge, collapse, irving, spoke, speaks, guide, equal, others, reliable, funding, service, paramount, constitutes, behavior, ratios, salient, traditionally, attributed, outcomes, beautiful, kept, sentence, quoted, sixty, blink, eye, lifetime, unlike, depressing, whose, expected, persist, removed, finding, themselves, levels, seen, depressed, resolved, unit, substantially, seek, periods, producing, ongoing, drag, discussions, saving, decisions, dark, understand, lyndon, baines, johnson, budget, director, charles, schultze, magazine, dec, possibly, accident, suggested, ambivalence, versus, 2003, victors, claiming, reminds, presents, myopic, egotistical, 50s, comparable, authors, write, 1950, present, clearly, expressed, arrogance, superiority, surprisingly, christina, lucas, thesis, lecture, macroeconomics, original, succeeded, prevention, purposes, wiggle, slide, 1984, exhibited, marked, commonly, referred, implications, exogenous, shocks, largely, guidance, conducted, won, liked, marcus, nunes, favorite, totally, valid, representative, relevant, handful, excel, files, 1940, including, odd, 1977, accounting, labeled, third, delete, omb, uploaded, cleaned, fit, multiplied, looked, determinants, determinant, having, object, killed, drain, minimum, reached, picking, debts, ours, fly, ointment, pretense, forgets, decrease, newly, printed, happen, headache, basic, illusionist, waves, pretends, existed, magical, declares, calls, hinderer, via, latter, pushed, decreased, twice, fast, dwell, lagging, argued, extent, ability, loans, depends, illusion, troubles, 21st, wisp, applies, epilogue, subject, dealer, suppose, everyone, yen, met, sufficient, mischief, goose, damn, flock, turns, search, turned, internally, neighborhood, passes, near, under, ignore, accurate, agencies, holding, holds, vertical, showed, nonfinancial, sectors, fgtcmdodns, fygfdpun, fygfd, gfdebtn, description, maxvalue, renumbered, considering, stages, slapped, onto, direction, thereafter, jerks, continuously, 1961, 1978, dragging, till, 1993, during, finally, upon, 1990, bold, claims, tend, directions, goal, causality, presently, weaknesses, possible, bound, revitalize, reducing, enhance, notes, defined, hour, estimates, filter, parameter, conference, board, groningen, development, centre, database, ggdc, mary, amiti, kevin, stiroh, examines, attempts, distinguish, among, american, leadership, industries, contrasted, particular, episode, technological, acceleration, independent, unrelated, issued, nber, 8771, gordon, term, grabbed, 1948, popped, fiddled, averages, fairly, smooth, brought, threw, outline, declines, moved, facilitating, travel, veer, separation, somewhere, became, hindering, helping, 2019, replaced, dug, quit, digging, fortunately, skeptic, reality, farm, prs85006092, jazzbumpa, rant, noticed, mention, apparently, encouraging, reward, triple, hurt, shareholders, obama, assault, wall, street, journal, copyright, arthur, shipman, zoho, withering, shoots, waste, fraud, abuse, verdoorn, urgency, umic, ulc, tot, tongue, cheek, tint, knob, transaction, symmetry, deception, star, trek, standard, deviation, spreadsheeting, report, simulated, evidence, simulacron, serfdom, sequence, scott, reviews, green, writing, printing, controls, predicting, pfi, parameters, oil, linear, tools, motives, multiplier, military, medium, account, math, matched, fekete, malaise, ego, captain, introduction, iceberg, sleep, humor, hover, craft, hoarding, revisionism, phase, calc, gresham, law, shortage, gds, gang8, fun, mpc, disclosure, fpi, financialization, final, failure, embrace, excuse, erosion, eroc, forces, echoes, disarray, deflation, limit, reissue, inside, equilibrium, bulge, debasement, chronicles, efficiency, coping, coinage, civ, calculating, best, downs, behavioral, finte, greater, artish, adjusting, discoveries, 400k, revision, 1986, calculation, contact, tufte, normalized, scaled, mental, workout, ignorance, kardi, teknomo, organize, supreme, court, jester, prac, vin, faq, bloogger, within, color, codes, sentral, test, help, schools, menu, tips, spoiler, theory2life, irrational, unsettling, broad, oak, redonomics, margin, freshman, dolor, rants, dredd, mayday, books, jbpeebles, addicts, anon, frozen, arctic, tundra, blended, purple, candid, troublesome, action, nextblog, skeptical, optimist, worthwhile, canadian, father, cybereconomics, crises, businomics, ecometry, william, hummell, flavianopolis, aquinum, razor, crystal, bull, williams, sgs, econompic, secret, mark, wieczorek, perot, historicalstatistics, irs, corp, 2006, top, usgovernmentspending, economagic, flow, bea, accounts
Text of the page (random words):
e debt affects the economy however the dominant approach to economics known as neoclassical economics ignores them completely on the a priori grounds that the aggregate level of private debt doesn t matter only its distribution can have macroeconomic impacts page 2 while outside the scope of this paper it seems clear that it was only the massive increase in federal borrowing that allowed the private sector to deleverage successfully in the 1940s mmmm i d like to see more on that i get it i got it from mmt i think but i don t have it i need to keep kicking it around until it makes sense to me the way dpd makes sense to me i ll get there eventually meanwhile let me point out that if the problem is excessive debt and the need to deleverage then the solution ought to be neither another world war nor another massive expansion of the role of government in society all we need is to pay down the debt we could do it with congress and the treasury but they d be likely to bicker forever and to expand the role of government anyway i d rather have the federal reserve stand up and say oops we made a mistake we thought it would be okay to let the accumulation of debt grow faster than the quantity of base money and m1 and unencumbered forms of money but we were wrong now we see we are wrong and we wish to set things right we will make an adjustment we will print money and use it to pay off debt and thus remove the liabilities from the private sector and rescue creditors as an accidental byproduct of our efforts we will no longer print money and use it to buy up risky assets rescuing creditors but leaving debtors to hang leaving the economy in tatters please note that this is a temporary emergency measure and that our policy will change again as debt falls to a level that enables economic recovery and growth page 3 jw mason s figure 1 non financial leverage 1929 2011 figure 1 suggests that policymakers have good reason to be concerned with rising leverage but also suggests that private leverage should be at least as much a focus of discussion as public leverage amen page 3 bottom between 1980 and 2000 households reduced their borrowing compared with the prior two decades but saw a rise in their debt burden mason follows that observation by returning to his focus the increase in household leverage over this period is fully explained by fisher dynamics that is by the increased burden of existing debt in an environment of higher nominal interest rates and lower inflation this is in sharp contrast with the usual story of rising household borrowing after 1980 but let me stick to my focus and point out that it makes perfect sense that between 1980 and 2000 households reduced their borrowing compared with the prior two decades because growth was slower after 1980 than before it s like confirming what i thought i knew and yes a rise in the debt burden would be a consequence of for example lower inflation and higher interest rates but don t forget that the policies that led to lower inflation and higher interest rates were created consciously and on purpose to fight a prior problem the inflation of the 1970s and i return again to the notion that when the inflation arose in the 70s it came not in tradeoff with unemployment but as a complement to unemployment the stagflation of the 1970s was a new and different problem and it could not be solved by people who were used to thinking of a tradeoff between inflation and unemployment like solomon then policymakers split the stagflation problem in two they took a both problem and dealt with it as two separate problems they would fight inflation with monetary policy and they would invent new tales of government and regulation to deal with unemployment and growth and as with solomon splitting this baby was not the answer posted by the arthurian at 4 00 am 1 comments tuesday february 14 2012 encumbered money from does expanding the amount of debt free money reduce indebtedness at ralphonomics money can be split into numerous different categories but one type of categorisation is to split money into so called debt free money and in contrast money which consists of a debt which is passed from hand to hand central bank created money monetary base is essentially debt free in theory this money is a debt owed by the central bank to the holder of such money but central banks make absolutely no promise to give anyone anything e g gold in exchange for this money thus it is essentially debt free in contrast commercial bank created money is essentially a debt which is passed from hand to hand i ll call this debt encumbered money yeah money that comes from the central bank is not debt in the days when you could turn in your paper and get a fixed amount of gold for it yes the paper was a promise to pay gold it was an iou for gold it was a debt not any more today the dollar has taken the place of gold you don t get something for the dollar you get the dollar there is no more promise to pay something for central bank money for government issue money it s different with bank issue money to be sure it s a heavy word encumbered but that is somehow appropriate given the burden of private debt today taking a second look at this i like ralph s word encumbered i like that he defines two types of money encumbered and debt free i really like ralph s view that central bank money is not debt because there is absolutely no promise to give anyone anything in exchange for this money i would add that the central bank creates this money from nothing which means it doesn t ever have to be paid back i have just a touch of trouble with the notion that commercial bank created money is essentially a debt which is passed from hand to hand it isn t if money was a debt an obligation passed hand to hand nobody would want it when you take out a loan you and the bank create new money and new debt that twin creation is a new use of credit then you spend the money you borrowed and you are left with the debt the debt does not circulate the debt stays with the borrower and the new money well once separated from the debt it becomes indistinguishable from money created by the central bank the reason it is important to define two types of money has to do with debt when you or i create money we also create debt but when the central bank creates money no debt is created our money is created by creating debt central bank money is not when you take these two types of money or practical versions of them like spending money and total debt and make a ratio of them the ratio is an indicator of the cost of credit use which must be compared to other costs in the economy excessive cost inhibits growth the excessive cost of credit use is an unnecessary cost rather than letting people create money and debt at the same time central banks should provide enough debt free money to accomplish to same amount of economic activity this way there is no change at all except interest costs are reduced so cost push inflation is reduced so that profits and wages and living standards improve posted by the arthurian at 4 00 am 14 comments monday february 13 2012 productive argument with a touch of irony in their 2007 article the real economic crisis dean baker and john schmitt attempted to shift attention from the bursting of the us housing bubble to the sharp deceleration in productivity growth since the middle of 2004 from the article between 1947 and 1973 the golden age of postwar capitalism productivity growth averaged about 2 8 per year in the united states from 1973 through 1995 however productivity growth took a nosedive with the average rate dropping to just 1 4 from the mid 1990s on however official productivity growth again accelerated rapidly returning to a 2 9 rate reminiscent of the golden age quite suddenly though in the second half of 2004 productivity growth dropped sharply again summarizing those dates we observe 1947 1973 1973 1995 1995 2004 2004 2007 good no good good no good andolfatto links to the productivity slowdown reaffirmed by james kahn and robert rich and offers a snippet from their opening paragraph economists generally agree that productivity is the primary ingredient for sustainable growth in gdp and wages the august productivity data release provided some clarification regarding trend or long run gdp growth but the news was not good following a resurgence of strong productivity growth in the late 1990s and early 2000s after nearly a quarter century of slow growth beginning in 1973 the latest reading from a trend tracking model now indicates that slow productivity growth returned in 2004 kahn and rich do indeed reaffirm the termination dates 1973 and 2004 noted by baker and schmitt and reaffirm the goldenness of the 1947 73 period david andolfatto s post is a follow up to his what output gap on james bullard s wealth shock theory thus in the new post andolfatto expands on the consequences of overestimating potential gdp or trend growth he refers again to kahn and rich it is widely believed that the difficulty of detecting a change in trend growth contributed significantly to the economic instability of the 1970 s as policymakers were unaware of the slowdown in productivity growth for many years and only much later were able to date the slowdown at approximately 1973 this resulted in overestimating potential gdp at least so the conventional wisdom goes and setting interest rates too low and double digit inflation followed not long after if the fed permits money growth commensurate with an over estimate of potential output the result will be inflation the argument for slower money growth today gains strength by comparison with the 1970s because we know what happened then but this does not mean the argument is correct we don t know that the circumstances are similar we cannot measure potential output it is all a guess dismiss the analogy to the 1970s then do what you will with the rest of their argument at the fed they attribute changes in productivity trends to events such as wars changes in government policies or structural change in the economy kahn and rich elsewhere that is anywhere but at the fed i on the other hand attribute changes in productivity trends to changes in the debt per dollar ratio the reliance on credit and the factor cost of money nowhere but at the fed here s the thing at the fed they re wearing blindfolds and swinging sticks trying to hit potential gdp meanwhile i am saying that what they think are changes in potential output are simple results of changes that you can see in the debt per dollar curve part 1 part 2 this is part three posted by the arthurian at 7 04 am 7 comments labels 3 bullard s earthquake wealth shock krugman has an interesting take on james bullard s wealth shock idea maybe the idea is that the burst bubble reduces demand and hence leads to lower production yeah that s how i took it though i had to wait for krugman to make it clear but what else can it be if a wealth shock leads to lower gdp it s not that we re suddenly able to produce less it s that we re suddenly buying less that follows from the wealth effect i don t buy the wealth effect story myself i m with jazz on that given empirical data that closely links consumption to income how can consumption depend primarily on wealth rather than income but falling demand due to a wealth shock and its wealth effects was the only way i could make sense of bullard s rather direct words the negative wealth shock lowers consumption and output krugman again maybe the idea is that the burst bubble reduces demand and hence leads to lower production but at that point you re into a keynesian world of deficient demand and you should be talking about ways to close the gap not accepting it as a fact of life i thought that was clever rubbing bullard s nose in his own keynesian poo you should be talking about ways to close the gap not accepting it as a fact of life i m with krugman on that here s mine if andolfatto was trying to explain why gdp was slumping and why potential gdp was slumping because of excessive private debt for example i would have some use for his analysis but like bullard he brushes aside any concern with special factors and headwinds david andolfatto seems to be saying only that things are bleak and we ought not expect anything better we do expect better however krugman tells only one side of a story yes demand is inadequate the other side of the story is that demand must be excessive according to bullard remember inflation is already above our new explicit 2 target level he wouldn t tell us that unless he thought it time to start pushing interest rates up again to curtail demand so demand must be excessive in bullard s view only two percent yeah and if i thought bullard s wealth shock analysis was right i d support him at two percent other people think we ought to push the inflation target higher up to four percent maybe if i thought that would solve the problem i would support it but the problem is certainly not that prices are going up too slowly that s not the problem at all the problem as krugman said is that we re in a world of deficient demand but it s an inflationary world of deficient demand so wait let s not talk about ways to close the gap let s talk about how we got into this mess because this world of simultaneously insufficient and excessive demand is a result of the problem that needs to be fixed we got into this mess when everybody started deleveraging paying down debt rather than borrowing more and spending more we started borrowing less and paying off more so the reduced borrowing is spending that we re not doing and the paying off is more spending that we re not doing a double whammy on spending so paying down debt is the problem no paying down debt is our solution to the problem the problem is that we had so much debt in the first place private debt i left bullard hanging bullard is concerned about inflation now i know a lot of people just want to dismiss that concern because we have bigger problems but you can t just dismiss arguments you don t like you have to deal with them and show them wrong or accept them or bide your time and don t jump to any conclusions that s always a good rule so the inflation i don t think inflation is a crisis but i don t like a two percent target i like a zero target even if i can only fail to achieve my target and i really don t like the doublespeak that says a constant price level when it means a constant inflation rate bill mitchell recently pointed out an example of that in that press release the ecb said it main role was to achieve price stability that is stable inflation anyway bullard he says if we over estimate potential output and set policy by it we will encourage excessive demand and we will get inflation like we got in the 1970s and he says inflation is already above target everybody else says the economy is not growing enough and we don t have jobs enough and unemployment is too high...
|
