Archive for the ‘New Posts’ Category

The new asymmetric risk

February 9th, 2018

For years, economists, including no less than former Fed chair Janet Yellen, talked about the concept of “asymmetric risk,” or AR. In this earlier context, which related to monetary policy, AR maintained that the risk of weak demand was greater than that of faster inflation. Therefore, the full-employment side of the Fed’s mandate should get… Read more

Links and a musical interlude from the Professor

February 9th, 2018

First, here’s a post at WaPo wherein I point out that as long as new tax revenues remain off the table, then we’re implicitly agreeing to ever-higher deficits and debt. Here’s another one on how we shouldn’t let the prevailing fiscal dynamics tie us up in knots. And, far better than the above, here’s Professor… Read more

This moment in deficit spending

February 8th, 2018

There’s an interesting argument in play right now as to whether current deficit spending is welcomed or problematic, and what its impact might be. The motivation for the argument is the deficit financing of the tax cut and the new budget deal (which adds at least $300-$400 billion to the debt over the next decade),… Read more

Will wage growth boost price growth? Sure, but how much depends on whether the near past or the distant past is prologue.

February 6th, 2018

As the stock market works out its manic episode of the past few days, let’s get into a question of great importance: if wage growth is really accelerating, what will that mean for price growth? This relationship is at the heart of the market selloff that’s got everyone pretty freaked right about now. As I… Read more

Links, High vs. Low Wages

February 5th, 2018

The stock market opened way down, continuing last Friday’s selloff, though it has climbed back since the open–implying the return of volatility–as skittish investors continue to fear the sequence I describe in this AM’s WaPo: tight labor market, wage pressures, higher interest rates, inflation, lower profit margins. Underneath these swings is an unsustainable, inequitable economic… Read more