16 Sep 2013


Daniel Kuehn, Economics, Federal Reserve, Financial Economics, Market Monetarism, Nick Rowe, Politics, Potpourri, Scott Sumner, Shameless Self-Promotion 13 Comments

==> The WSJ and I are pen pals.

==> Next week on Friday (September 27) I’ll be giving a talk at San Jose State on interventionism in the Austrian tradition. (I’m in California because on Saturday I’m giving the keynote address for a celebration of Mises’ birthday. I still haven’t gotten his present, gah!!)

==> Alex Tabarrok should tell firefighters to crack down on unregulated supper clubs and thereby justify their budgets.

==> This “Nomocracy in Politics” seems like a website with a fairly unique perspective.

==> Daniel Kuehn in his inaugural EconLib article, where he challenges the conventional view that immigration policy should cater to highly skilled immigrants in the STEM fields. Obviously I don’t think the government should be using guns to influence the movement of people at all, but I could still see somebody saying–even after reading Daniel’s article–that “if the feds are going to limit immigrants to X people per year, then they should give preference to people who would earn a high salary right off the boat.” (And actually I bet such people would come here on ships, not boats.)

==> Some celebrities who were quite sweeping in their denunciations of hawkish US foreign policy under Bush, but are now strangely silent. (BTW I’m just assuming the article is being fair, and that these celebrities really have been silent under Obama. I’d be happy to correct this, if any of you have counterexamples.)

==> Nick Rowe admits that nominal GDP targeting is a vicious dog with sharp teeth.

==> Can you imagine if you were an MBA student, minding your own business, and then you had Nick Rowe teaching you about the time value of money? You’d probably drop out and switch to philosophy. (BTW I’m just being “funny,” Nick’s post is awesome. I’m just joking that 99% of his students probably have no idea how deep he gets into this typical stuff that most lecturers would breeze through without giving it much thought.)

==> Just for fun.

==> Another surprise monetary policy announcement, another example of easier money leading to lower interest rates. Yawn.

13 Responses to “Potpourri”

  1. John Dougan says:

    I was amused in that Nick Rowe thread where he implied that worrying about Goodhart effects is nihilistic:


    Maybe the guard dog goes to sleep sometimes?

  2. Tel says:

    A macroeconomist will next want to talk about the Zero Lower Bound on nominal interest rates. And will want to make the point that the ZLB is an artefact of the practical difficulties of paying either positive or negative interest on paper currency. If the Bank of Canada issued only electronic money instead of electronic money plus paper notes, there would be no problem in paying negative nominal interest rates.

    This is ridiculous, people would just buy PM or any similar tangible asset, it is the existence of such assets in the physical world that imposes a ZLB on the financial world.

  3. Tel says:

    As I’ve mentioned elsewhere in response to DK’s skilled immigrant article… if a lack of skills is desirable amongst recent immigrants, then logically a similar lack of skills would be desirable amongst the population as a whole, so it is surprising we tolerate education at all.

    • Daniel Kuehn says:

      I don’t understand this point at all. Who says a lack of skills is desirable?

      • Tel says:

        Oh, so skills are desirable? Hey, here’s an idea, if we import more skilled immigrants…

        • Daniel Kuehn says:

          Ooooh! Or let’s ship unskilled Americans to Australia!!!

          • Tel says:

            Dare you to try it.

          • Richie says:

            You’d be the first one on the boat, double-talker.

  4. Tel says:


    Another perspective on what went wrong in Detroit, with a review of budget numbers, tax hikes, etc.

  5. Matt Tanous says:

    I’m a bit confused about Rowe’s bit on the Time Value of Money. Mainly because I fail to see how the example of so-called “option theory” is not simply an example of time preference… or why time preference is a “macro” phenomenon instead of a “micro” one. “Macro” does not rule finance – price determination does. And price determination is not a “macro” phenomenon. I didn’t learn about supply and demand, etc. in any “macro” class. (And that isn’t just because I didn’t actually take economics courses to learn this stuff…. nor because I view this distinction as meaningless in a proper understanding of the science.)

    • Tel says:

      I think the general gist is that because money is equivalent to other money, and liquid, and portable the world over; the upshot is that we always work in a global market for money, not a local market.

      Although the market for apples and pears is limited by transport, spoilage, etc, the market for money can ignore such things.

      Someone will likely point out that there’s a lot more to finance than the supply of money, such as judging risks for example. Also, governments have gone to a bit of trouble to make sure you can’t just move your money around the world any time you feel you want to. Nick will no doubt talk about that some other time.

      I’m still trying to figure out how I can borrow money from a US bank at the very low interest rates I’m seeing listed as current “interest rates”

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