At around 9:00am London time this morning Lord Wolfson held a press conference to announce the five finalists in his economics prize contest. I have done a podcast discussing the prize objectives and their implications with the Spain based British blogger Matthew Bennett. You can download it here. The first thing that needs to be said about … Read more
From the FT: The European Central Bank has averted disaster, sparking a powerful relief rally – but nothing fundamental has been resolved. Greece may need another debt restructuring; Portugal and Ireland may need restructuring too. Spain and Italy may yet come under the gun. Banking crises are hardly ever resolved without removing toxic assets or … Read more
Update: Paul Krugman has posted a reply to this post that is a straw man. He and Nick Rowe are viewing this all through the lens of the old Monetarist/Keynesian debates in which there was a choice b/n interest rate targets and monetary aggregate targets; the Monetarist critique assumed the Keynesians were going to keep interest … Read more
Last week I explained why Minsky matters, outlining his main contributions. See here: https://www.economonitor.com/lrwray/2012/03/27/why-minsky-matters-part-one/#idc-container This was, in part, a response to a blog by Paul Krugman that appeared to dismiss the importance of trying to find out “what Minsky really meant”. See here: http://krugman.blogs.nytimes.com/2012/03/27/minksy-and-methodology-wonkish/ But, more importantly, it was a response to his defense of … Read more
Luxury retailers are smiling. So are the owners of high-end restaurants, sellers of upscale cars, vacation planners, financial advisors, and personal coaches. For them and their customers and clients the recession is over. The recovery is now full speed. But the rest of America isn’t enjoying an economic recovery. It’s still sick. Many Americans remain … Read more
The ECB released its February report on monetary developments in the Euro area. This is an important report, since it will highlight whether or not the ECB’s LTRO is ‘working’, rather if the new liquidity is passing through to the real economy via new lending. On balance, it’s probably too early to tell, since there … Read more
Bill Gross is out with his monthly commentary. Because his points are central to the discussion of policy and markets right now, I am going to write this weekly newsletter commentary outside the paywall. Below are the key points as summarized at the outset of Gross’ column: How do we deliver in this New Normal … Read more
My friend Steve Keen recently presented a “primer” on Hyman Minsky; you can read it here: https://www.economonitor.com/blog/2012/03/a-primer-on-minsky/ In his piece, Steve criticized the methodology used by Paul Krugman and argued that Krugman could learn a lot from Minsky. In particular Krugman’s equilibrium approach and primitive dynamics was contrasted to Minsky’s rich analysis. Finally, Krugman’s model of debt deflation … Read more
The plot of the movie WarGames (1983) involves a slacker hacker (played by Matthew Broderick) who starts playing the game “Global Thermonuclear War” with Joshua, a Department of Defense (DoD) supercomputer that has been given partial control by DoD of our nuclear forces. The game prompts Joshua, who has been programmed to win games, to … Read more
Here comes the confirmation with a poor flash PMI for March. From Markit; “Weakening domestic demand continued to weigh on growth, as indicated by a slowdown in new orders which came in at a four-month low. External demand remained in contraction territory, but the decline was at a slower pace, implying that there are no … Read more