Tag Archives: Notes

Goodreads rating 4.55. Surprising, sympathetic.

On bankunderground, Michael Kumhof, Phurichai Rungcharoenkitkul, and Andrej Sokol question that foreign savings is an important driver of US current account deficits: Consider how US imports can be paid for in the real world: first, by transferring existing domestic or foreign bank balances to foreigners, which involves no new financing. Second, by borrowing from domestic banks and transferring the resulting bank balances to foreign households, which involves domestic but not foreign...

Some modest new year’s resolutions inspired by the commencement speech of US Navy Admiral William H. McRave.

Goodreads rating 4.39. Concise, to the point, insightful.

Goodreads rating 4.11. Tranquility.

Goodreads rating 4.17. Stronger on relativity than on quantum mechanics and thermodynamics.

Olivier Blanchard, Public Debt and Low Interest Rates, AER 2019, 109(4). Robert Barro, r Minus g, NBER wp 28002, October 2020. Dmitriy Sergeyev and Neil Mehrotra, Debt Sustainability in a Low Interest World, CEPR dp 15282, September 2020. Stan Olijslagers, Nander de Vette, and Sweder van Wijnbergen, Debt Sustainability when r−g<0: No Free Lunch after All, CEPR dp 15478, November 2020. Ricardo Reis, The Constraint on Public Debt when r<g But g<m, Mimeo, December 2020.

Writing about CBDC, John Cochrane makes it clear that he is in favor. He links to my work and writes Dirk Niepelt has written a lot about CBDC theory, including reserves for all in 2015, a recent Vox-EU summary and papers,  here with Markus Brunnermeier a JME paper “CBDC coupled with central bank pass-through funding need not imply a credit crunch nor undermine financial stability,” a follow up including “The model implies annual implicit subsidies to U.S. banks of up to 0.8 percent...

On Fazit, Gerald Braunberger reviews the concept of “liquidity trap.” Keynes never used the term but Robertson did. Hicks introduced the common notion (represented, e.g., by a flat LM curve). Krugman talks about a different trap. So does Blanchard and he (incorrectly) attributes it to Keynes. So does Sinn.

Alberto Bisin (Journal of Economic Literature, December 2020) reviews Stephanie Kelton’s “The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy:” Never is its logical structure expressed in a direct, clear way, from head to toe. … Some of these statements are literally correct but used for incorrect or misleading implications—plays on words, effectively. They seem taken directly from the book of tricks of the Greek sophists (the ones Aristophanes makes fun...