New Fed Board hawk a “reverse-causation” champion

The two probable Federal Reserve Board nominees whose names surfaced late last week should on balance bring a hawkish view on inflation to contest the mainstream (neoclassical) Keynesian stance of Chair Janet Yellen on macro policy. They can be expected to seek a higher trajectory for U.S. short-term and long-term rates. In particular, Marvin Goodfriend, one

06 Jun 2017

The Nation gets around to MMT!

…and even says that it has “rock star appeal”–no surprise at our end, of course. The article on modern money theory is to appear in the magazine’s May 22-29 issue, and can be found on its website. For more on the media’s take on this movement in economics as well as the coordinates of some

24 May 2017

Trump tax plan brings helpful discussion of “vigilante” bond theory

The Financial Times‘s Alphaville blog notes discussion of a “bond vigilante” effect has returned with the announcement of Trump’s deficit-increasing tax plan. The idea is that anticipations of increased bond supply will force interest rates on US Treasury securities upward–a “crowding out” effect colorfully attributed to bond traders called “vigilantes.” There is currently little evidence

22 May 2017

Vegan issues meet the health care policy debate

I have not talked about health care very much since the new US administration began. Warren Buffett has made the news with an argument that health care costs were a far bigger problem for business than corporate taxes, which are another big item on the agenda of the new administration. Unlike most economists quoted in

18 May 2017

Financial precariousness not ebbing

What has  happened to the big bubble in risky, nonsovereign-currency debt–most emerging market bonds, domestic junk bonds, etc? What has not defaulted appears to be continuing to inflate, with buyers piling into these markets. Some articles in the press have in fact been observing that relative calm has lulled investors in some types of securities,

15 May 2017

Our post-Keynesian model: Support a populist economic agenda

Discussion of macro models at a recent event occasions a somewhat self-critical look at the model that I have worked on since about 2011 and with the help of academic colleague Tai Young-Taft since late 2014—as well as a look at what to expect as the U.S. economy approaches full employment. I will warn readers

07 May 2017

A Washington analyst on the Trump tax plan

Here I link to an interesting piece on a Bloomberg blog by Albert Hunt, who offers an analysis of the Trump tax plan, which I discussed myself in an earlier post. Watch out for his discussion of the elimination of the personal exemption, a provision that would increase the tax bill of many people with

03 May 2017

A new one-diagram critique of mainstream economics

In honor of a talk about to start at the New School for Social Research and to begin to offset all the talk here and elsewhere about policies that best address issues of economic growth and fair distribution without a reminder of other things that matter, I present at the top of this post a

01 May 2017

The real and unreal in Trump’s tax plan

Tax observations: The burden of the corporate income tax—surprise—really does fall mostly on corporations and their owners, rather than being passed along to consumers. Hence, cuts in this tax—just plain cuts—are likely to increase the after-tax income of the wealthy much more than middle class or poor people. This must be kept in mind by

01 May 2017

Post-conference post

On Friday and Saturday, an economics department held a conference in honor of  its new building. There was little unbridled praise of free markets. Many celebrants were people who had been students in the Ph.D. program in the department, which got its start as a radical department in the 1970s. The design of the new

30 Apr 2017
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