Asymptosis: Always Approaching

Asymptosis: always approaching

  • Should The Inflation Target be 4.3%?

    I’m quite tongue-in-cheek in asking that question, but nevertheless: I present for your delectation what at first blush seems like a revealing bit of chart porn (hat tip: Zero Hedge): You could flip this upside down and replace “Earning Yield” with “PE ratio.” The data displays a remarkably regular relationship. Equity investors seem to be most optimistic…

  • Scott Sumner Goes Marxist, Proposes Targeting Labor’s Share of Income

    I’m joking of course. He’s still grinding the supply-side axe (though judiciously here, IMO). But you gotta admire a fellow when he follows the logic of the data where his own logic requires him to go. He’s just done three posts about Germany’s growth and unemployment rates through the great recession: Annualized change, Q1 2006…

  • No: Less Consumption Does Not Cause More Investment

    At risk of stating the obvious, in this post I’d like to highlight a pernicious misunderstanding that I find to be widespread out there in the world. This is not new thinking. You’ll find a more sophisticated historical account, stated very clearly though in somewhat different terms, in the first few pages of this PDF. Still,…

  • The Villain of Building Energy Efficiency: Triple-Net Leases. Not Picking the Low-Hanging Fruit

    An old friend dropped by recently and we had a few beers on the back deck. He runs his family’s commercial real-estate business; they own and operate half a dozen or so pretty large properties (and just bought another) — a mall, office buildings, mixed use. I was really curious to talk to him about…

  • “Track Changes” on Fed Statements

    This if nifty, from The Wall Street Journal: Hat tip Barry Ritholtz. Cross-posted at Angry Bear. Related posts: Banks’ “Bigger Concern”: “Republicans will no longer defend Wall Street companies.” Tea Partiers and OWSers: Who Needs to Get a Job? Financialization and the Stripping of the Middle Class, in Twelve Graphs Stockman: How the GOP Destroyed the…

  • Fed today: “fiscal policy is restraining economic growth”

    That is all. FRB: Press Release–Federal Reserve issues FOMC statement–May 1, 2013. Cross-posted at Asymptosis. Related posts: Full-Reserve Banking Goes Mainstream “Track Changes” on Fed Statements More American Exceptionalism: Drowning the Baby in the Bathwater It’s Working: Pubs’ Polls Plummeting Elephant in the Room: Upward Redistribution, Concentrated Income and Wealth, and Secular Stagnation

  • Yowza. Now Even AEI is Dissing Austerity.

    Fiscal austerity–or deficit cutting–is the subject of much current debate. As Europe proves, severe austerity can slow growth or lead to recession. Despite periodic slowdowns, the US economy is on a sustainable fiscal path. The deficit is projected to drop below 2.5 percent of GDP by 2017, below its 30-year average, helped partially by the…

  • “Yes, the government must pay its bills in the long run.” (Every few centuries?) Questions for Krugman.

    I’d like to push back on Paul Krugman a bit, on this bit in particular: Yes, the government must pay its bills in the long run You hear this from him a lot. And I want to ask him: Paul, are you letting yourself be sucked into the very syndrome that you so bemoan and…

  • Currency is Equity, Equity is Currency

    This is utterly brilliant: Twitter / izakaminska: Why equity is a type of privately issued currency Steve Randy Waldman has been here before, with the idea that currency issued by government (ultimately through deficit spending) is “equity” in government, or in America. But this reverses it beautifully, with the notion that private equity issuance is…

  • Do Savers “Take Resources out of Society”?

    Revisiting a previous post, “Saving” ≠ “Saving Resources”*, wherein I question Scott Sumner’s notion that people who spend and consume more (save less) take resources “out of society.” Try this: John works for Debbie, and Debbie works for John. They each start out with $100 in dollar bills, $200 total. They pay each other in…

  • All Currency is “Fiat” Currency

    Or to be more precise, all currency is consensus currency. Units of exchange (dollar bills, great big rocks at the bottom of the ocean) can have value merely because everyone in a community agrees that they have value. That value need not be declared, defined, or enforced by some “fiat” authority with powers of (ultimately physical)…

  • Full Cred and Props to Reinhart & Rogoff and the BEA: They Collected the Data

    The other day I dissed the analysis in Reinhart and Rogoff’s Growth in a Time of Debt as being on the level of a blog post from an amateur internet econocrank. I still hold that opinion. But I want to walk back on that, or at least clarify, and give lots of credit where due. Because they did make…

  • Identity Games: Saving ≠ Saving? Whodathunkit?

    I finally figured out a simple way to explain my confusion (and that of many others, including many economists) with the whole Saving issue. I may also have figured out a useful solution to that confusion, which I present at the bottom here for my gentle readers’ delectation and denunciation. Econ profs: I’m really curious.…

  • Note to Reinhart/Rogoff (et. al): The Cause Usually Precedes the Effect

    Or: Thinking About Periods and Lags No need to rehash this cock-up, except to point to the utterly definitive takedown by Arindrajit Dube over at Next New Deal (hat tip: Krugman), and to point out that the takedown might just take even if you’re looking at R&R’s original, skewed data. But a larger point: I frequently see econometrics…

  • Okay Fine, Let’s Call Investment “Saving.” Or…Not

    I really like Hellestal’s comment and linguistic take on this whole business: I’m comfortable changing my language in order to communicate. I have very little patience for people who aren’t similarly capable of changing their definitions. This discussion is really about the words we use to describe different accounting constructs. Nick totally gets that as…

  • Saving, Investment, and Lending in the Real Economy (Graphs). S=I?

    With all the chaff that’s been flying around (recently, and for years now) about saving and investment, dissaving, and lending/borrowing, I felt the need to go back to the numbers and see how they’ve played out over the decades in what we tend to call the “real” economy — domestic households and nonfinancial business. Click…

  • Reading Mankiw in Seattle

    A while back Nick Rowe challenged amateur internet econocranks (my word, not Nick’s) like me to actually go read an intro econ textbook. (He was specifically targeting the author of Unlearning Economics — who I, at least, don’t consider to be an econocrank, he’s far better-versed than I am,  though Nick might.) I took him…

  • Solow on Bernanke (and both, on Libertopians)

    I’m just sayin’. (Emphasis mine, words Solow’s): [Bernanke’s] preferred answer is better and more system-oriented regulation. One has to ask then why regulation failed to see the crisis of 2007–2008 coming and take action to head it off. Bernanke suggests that regulators were lulled into inattention by the so-called Great Moderation. Our masters are all too…

  • How Money Moves

    The title should actually be “How Dollar Bills Move,” but it’s not as alliterative. A fascinating item on the work of Dirk Brockmann, who’s used WheresGeorge.com to map the movement of dollar bills, and the boundaries over which they’re least likely to cross: I have no idea what to do with this, or whether it even has any…

  • Saving and “Government Saving”

    Steve Randy Waldman and Scott Sumner (plus many others, linked from Steve’s post) wade in on notions of saving and investment. (I’m endlessly amazed that the best econothinkers on the web — add Nick Rowe, Andy Harless, David Beckworth, Josh Mason, and many others to the list — constantly feel the need to think, re-think,…

  • My Patriotic Millionaires Pitch

    Erica Payne sent out a request for writeups from Patriotic Millionaires members, and I provided this. I hate not to re-use perfectly good copy… I live (quite well) off financial investments — no need to work any more — and my taxes every year are ridiculously, embarrassingly low. Meanwhile tens, hundreds of millions of hard workers who…