@MacRoweNick

Amateur Mechanic. Professional Economist (retired). Better at fixing cars, because I can usually figure out what the designer intended.

 Near Ottawa
worthwhile.typepad.com/worthwhile_canadian_initi/
Joined October 2015
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64Media
Puzzling over (lack of) stock market reaction to trade war news over last few days. 1. Already priced in (saw it coming)? 2. Thinks peace deal coming? 3. Thinks it's no big deal? 4. Offsetting effects cancel out? 5. Nobody cares about future earnings?
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Nick Rowe retweeted
Garett Jones
@GarettJonesAug 20
So wrong. University leaders must denounce this, as I do.
Nathan Cofnas
@nathancofnasAug 20
I was just suspended by Ghent University. They will almost certainly fire me. The decision was made by rector Petra De Sutter, a former leader of the Green Party.
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Vivek Dehejia
@vdehejiaMay 17
Replying to @vdehejia @MacRoweNick @nfergus @HooverInst
Updated note on my paper with @MacRoweNick : xitter.cf/vdehejia/status/205605… The note does two things: (1) sketches an explicit microfoundation for our reduced form deadweight cost function, establishing that marginal DWC must be convex; and (2) numerical example with our special case.
Vivek Dehejia
@vdehejiaMay 17

The Laffer Curve and Precautionary Taxation: Microfoundations and Quantitative Illustration

Article · @vdehejia
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Possibly stupid (shower thought) Micro question: If I make my demand curve more elastic than is privately optimal, does that benefit others? (I adjust more to supply shocks (both directions), so others don't need to adjust as much.) (Thinking gas prices, of course.)
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I think the answer is Yes. Simplest model: the only goods are: apples; apple trees (an asset). Diminishing MU of apples means harvest fluctuations reduce E(U(C)). If I raise/cut my C more in good/bad harvests, my E(U) falls, but your C fluctuates less, so your E(U) rises.
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Has anybody dared call it "Trickle Down Theory"? (Seems to work, applied to housing.)
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A new technology (AI/whatever) will not cause real wages to fall unless it causes a rise in land rents (natural resources) or machinery rents (capital). (Otherwise workers/employers could/would just revert to the old technology, and increase their wages/profits.) 1/
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IMO (which isn't worth much), the biggest risk to real wages is if AI causes land rents (natural resource prices) to rise. Sorta like a Malthus/Ricardo model, except you're adding robot labour to human labour. 2/
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But anyway, if the relative price of labour falls, then the relative price of some other input must rise. And I don't see this point being made much. 3/3
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Nick Rowe retweeted
LorenzoFromOz@LorenzoFromFeb 8
Replying to @LorenzoFrom @Noahpinion @ScottSumnerTMI @GarettJones @GlennLoury @DrSamuelGregg @MacRoweNick @C_Harwick
6. But the reality is that conventional centre-right politicians are being displaced by national populists not because they did not pay attention to economists, but because they did. lorenzofromoz.net/p/why-we-s…

Why we should stop listening to economists on immigration

Unless and until they start analysing immigration like they do monetary policy: that it can be done well, badly, or disastrously.

lorenzofromoz.net
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My utility is measured in Celsius, your utility is measured in Fahrenheit. Both cardinal, but interpersonal comparisons are tricky.
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"Affordability" is the same as "real incomes". But it's funny how changing the framing leads you to think differently about policies that might improve it.
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I understand what Warren is saying here (at least, I *think* I do). Let me give my (massively over-) simplified interpretation: 1/
Warren B. Mosler
@wbmosler17 Nov 2025
Replying to @farmerrf
Markets (in the context of institutional structure) sort out relative value, but not 'absolute' value in terms of a currency. That information comes exogenously, in this case prices paid by gov. when it spends provides information for market prices to then be in that numeraire.
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That was massively over-simplified, of course. We can relax the assumption that the govt buys only rifles, and we can relax the assumption that the govt has a *perfectly* elastic demand curve at a given nominal price. 4/
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The key assumption, that we can't relax, is that the government has a *downward-sloping* demand curve for goods, as a function of the *nominal* (not real/relative) price of goods. Did I interpret you *roughly* right, @wbmosler ? 5/end
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I can't get excited about banks as financial intermediaries vs banks as creators of money. They are (obviously) both. IMO, the key (underlying) Q is: can banks create an *excess supply* of "hot potato" money? 1/
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So, there is a sense in which banks *can* create an excess supply of hot potato money. That excess supply of bank money (eventually) creates its own demand (via increasing NGDP). 4/
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BUT, you gotta be careful, and distinguish between an individual bank vs the banking system as a whole, and remember to ask what the central bank is doing if and when this happens. End.
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