Archive for the ‘Fiscal Policy’ Category

Five simple formulas that capture today’s economic challenges and solutions.

March 21st, 2016

Contemporary economics is often criticized for being too mathematical. How can we really capture the complex dynamics of what’s happening in people’s economic lives with a bunch of formulas? In fact, the point of all the math is to distill people’s complex experiences down to something we can model, understand, measure, and maybe predict. Yes,… Read more

Charles Manski on the importance of accounting for policy uncertainty

February 20th, 2016

I forgot to post this here yesterday, as I think OTE’ers would quite like it, within a confidence interval, of course. Charles Manski, an economist/econometrician who’s thought deeply about the importance of accounting for errors in economic data and forecasts, and who also miraculously speaks fairly plainly about it, agreed to answer some questions I… Read more

More on path dependency: describing the past is not endorsing the past…but these are the facts, like ‘em or not.

February 18th, 2016

I’ve apparently managed to confuse some people in my post yesterday about federal government spending and taxing as a share of the economy. Though to be fair to myself, always a good practice, it looks to me like those people a) don’t read my stuff (unforgivable!), or b) don’t want to face historical facts. First,… Read more

Not to be negative, but…a critical comment on negative interest rates.

February 15th, 2016

With most economic variables, I think we make too big a deal about crossing zero on the number line. I don’t feel great if real GDP’s growing at 0.2% and horrified if it’s at -0.2%. Deflation with price growth at -0.5% isn’t terribly worse than disinflation with price growth at +0.5%. But with nominal interest… Read more