Observed: Waves of financial caution and euphoria!

Hyman Minsky, whom we often talk about here, was a post-Keynesian economist who linked financial pheonomena–including financial crises–to John Maynard Keynes’s “general” macro theory. Stability brings instability–a pithy adage from Minsky–implies that financial caution declines as history moves on from a big crisis like the one that hit housing finance beginning in 2008. Waves of

20 Feb 2018

Review by Mason misconstrues role of the euro in Eurozone crisis

An interesting and helpful new book review in the Boston Review by the up-and-coming John Jay College of Law economist and blogger J. W. “Josh” Mason of Yanis Varoufakis’s book Adults in the Room makes a key mistake, misunderstanding the role of the post-1999 single currency in the fiscal crisis in Greece and other countries

14 Feb 2018

Debt burdens in Europe and South America and the secrets of MMT

Above: “Currency Composition of Argentina’s Public Debt (as a % GDP),” which appears as Figure 2 from post by Cibils and Arana in Triple Crisis blog (see discussion below). In writing my post yesterday, I noticed Paul Krugman recently commented on recovery in Europe, which has indeed occurred to a large extent in most of

13 Feb 2018

Discussion of debt-agreement effects confined after market correction

The market crash is now officially a stock market correction, a term for a drop of 10 percent or more. I will not add to my last two posts, except to mention that I agree with a statement in Paul Krugman’s column that Bitcoin are a concern of a different order and may be another

12 Feb 2018

Financial market drops and volatility fit into debate about Trump and Fed policies

I wrote on Monday about last week’s drop in the U.S. markets, only to find news later in the day of another big market drop. Further volatility has been occurring this week with another big drop the day of my post. The New York Times summarizes the market events through Tuesday or so at this

08 Feb 2018

Justifications real for macro and pension fund worries

Figure note: Reduced-size Financial Times graphic. Click here for full FT graphic. (Site registration and article limit apply for free views FT articles and graphics.): The markets dropped sharply again last week, with bond yields rising and U.S. stock markets falling sharply. Behavioral Keynesians (such as Robert Shiller in this recent New York Times article) and Minskyans

05 Feb 2018

Public pensions weakened in role as Labor’s Capital

The labor-oriented In These Times features a cover story by left financial analysts Doug Henwood and Liza Featherstone . Henwood, author of a helpful finance dictionary for the masses, blogs at and appears to have a new finance primer at Scribd. A short article in the same issue details the example of Puerto Rico’s

30 Jan 2018

Dollar weakness strong from perspective of known economics

Treasury Secretary Mnuchin’s suggestion at the same conference (CNBC link courtesy of New York Times Dealbook Briefing email) that the dollar might weaken without bothering U.S. economic policymakers drew generally skeptical responses from mainstream observers including Ben White’s article in and the people quoted therein. The Fed plans to continue raising the federal funds rate and unwind quantitative

26 Jan 2018

Alarmingly large Chinese corporate debt load in the news

A statement by a Chinese official at the big conference of financial heavyweights in Davos mentions a plan to reduce debt (My link is to a New York Times article on the official’s speech.) Various objective indicators suggest that the burden of corporate debt in China is indeed excessive and high enough to pose a risk

26 Jan 2018

Options in the tax wipeout aftermath

From Dean Baker, an economist with the Center for Economic Policy Research, a strategy for offsetting the loss of state tax deductibility that will occur when the tax bill is implemented: replacing state income tax revenue with revenues from a state employer-side payroll tax. Provisions of the bill do pose fiscal problems for a state without

12 Jan 2018
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