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Interesting IMF graph on the effects of euro fiscal expansion of 1% for 2 years through public investment with unchanged interest rates bit.ly/2ySqn5a Output higher by 1.4% for 2 years, higher output in the long run, and an increase in D/Y <1% Attractive trade-off...
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Cost of banana 2 dollars. cost of duct tape: 3 dollars. Price of banana with duct tape: 120,000 dollars. Conclusion for research: We need a deeper theory of markups (and entry in the banana plus duct tape market). twitter.com/gabriel_zucman…
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Economists, policy debates, and policy making. A note with Jean Tirole and Agnes Benassy-Quere. bit.ly/2vOPVe7
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The last thing the world needs at this juncture is another euro crisis. The ECB should and can avoid it.
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In one slide: The essence of our argument (with @jzettelmeyer and @AlvaroISLM ) for why the EU should move from fiscal rules to fiscal standards.
The long version: bit.ly/3knhzId. And the full video: economic-policy.org/fiscal-standar…
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Further thoughts on DSGE models: What we agree on and what we do not. piie.com/blogs/realtime… .
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How much of the the slowdown in the recovery is due to the fact that some sectors, while recovering, still face tight supply constraints and low relative demand, or that, because of uncertainty, overall demand is weak. What to do with macro policy depends crucially on the answer.
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On the euro architecture. The focus has been on fiscal and banking unions. To me, even more important is improving macroeconomic adjustments. And the only solution I see is national wage agreements. bit.ly/2CpPJJb
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3. The link to the English version of the report (warning: a rather voluminous 500+ pages) is available at bit.ly/3hYC0eT
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This chart from @jburnmurdoch is truly worrisome. 2% of the population is already a very large number, and the graph suggests that it will increase further. This is macro significant.
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On the need for (at least) five classes of macro models :) bit.ly/2nVMLjK
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2. When inflation comes from an increase in commodity and energy prices, convincing workers that unemployment has to increase to control inflation, is even harder. “Why should I lose my job because Putin invaded Ukraine ?”
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My discussion of Bernanke's paper on the crisis. 3 points
1. A typology of crisis. From multipliers to multiple equilibria
2. Multipliers vs multiple equilibria. Why it matters
3. When do multiple equilibria emerge? Dark corners or hidden mines?
bit.ly/2QFxLGq
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First tweet success, so second tweet :) The shape of the Phillips curve, and how it makes life harder for the Fed bit.ly/1OEbFLK
Robert Solow Professor of economics emeritus, MIT
Fred Bergsten Senior Fellow, Peterson Institute for International Economics