Wednesday, April 9, 2014

Light to no blogging starting a few days ago

I'm on a business trip to LA for the real job all this week, and I'm going on vacation next week; blogging will be light to non-existent. I'll be back at it April 22nd or thereabouts (thenabouts?). I'm working on a post about how expectations that deviate from what actually happens represent destruction of information.

Update: I was in a rather serious accident while driving in LA; my wife and I are shaken but doing all right. My car was totaled. There has been and will continue to be some additional time off.
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9 comments:

  1. Tom BrownApril 21, 2014 at 10:56 AM

    Jason, have you ever seen Nick Rowe draw an analogy between what the CB should do (at the ZLB I think it was) and the act of guiding a broom balanced in the middle of your hand to a new position? You may need to move your hand the opposite direction for a little bit to start off...

    What if the CB's job is more like balancing *three* brooms, one atop the other? Then you turn to something like this:
    http://pragcap.com/forums/topic/pendulums

    More here:
    http://pragcap.com/forums/topic/pendulums#post-64011

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    Replies
    1. Jason SmithMay 1, 2014 at 5:02 PM

      That's pretty neat ... effectively a series of coupled oscillators.

      Delete
    2. Tom BrownMay 2, 2014 at 1:17 PM

      I used pendulums for a video analogy (a few seconds of each is plenty) at Rowe's site:

      http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/05/the-new-keynesian-conspiracy.html?cid=6a00d83451688169e201a511aec630970c#comment-6a00d83451688169e201a511aec630970c

      Well more of a joke perhaps! :D (and even that last one involves an inverted pendulum!)

      Delete
  2. Tom BrownApril 22, 2014 at 7:30 PM

    Jason, when you get a chance, perhaps you could take a look at this comment:

    http://pragcap.com/did-market-monetarists-accurately-predict-low-inflation/comment-page-1#comment-173641

    Nothing special about that particular one, but I can't figure out clearly what he's talking about (most of the time). I have trouble on your blog too, but when I look closely you really are giving us the information we need to decipher what it is you're saying if we put in the effort. But comments like the above I wonder about: I understand all the words and have some guesses as to what he's saying, but I thought I'd run it past you to see if you understand. (maybe it's just me!). Thanks.

    If he really does have something to say, I try to encourage him to write it out properly on a blog or webpage so it's more clear:

    http://pragcap.com/did-market-monetarists-accurately-predict-low-inflation/comment-page-1#comment-173745

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    Replies
    1. Jason SmithMay 1, 2014 at 5:21 PM

      The Jacobian is sort of like shape of the funhouse mirror you need to change one "image" (monetary aggregate or other variable) into another ... so if the fed funds rate and reserves are related by a fixed funhouse mirror, then what Daschbach is saying is essentially correct mathematically. I would say that it is far from proven there is a fixed relationship between any set of economic variables. That is the heart of the Lucas critique ... the funhouse mirror deforms when you try to use it to accomplish some policy goal.

      Or rephrasing the Lucas critique in Daschbach's language, the Jacobian may be dynamic.

      Delete
    2. Tom BrownMay 2, 2014 at 1:20 PM

      I'm familiar with Jacobians... in fact I just used one recently in making one of Nick Edmonds' models interactive:

      http://banking-discussion.blogspot.com/2014/04/blog-post.html

      Thanks for the feedback. I'm glad you could make some sense of it. I often read John's posts and think they are comical in that I don't know who's he's addressing. Sometimes I think he's trying to sound obscure.

      Delete
  3. Tom BrownMay 2, 2014 at 1:24 PM

    Also, do you recall our discussion of Walras' Law? I found this on the subject:
    http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/walras-law-vs-monetary-disequilibrium-theory.html

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    Replies
    1. Jason SmithMay 2, 2014 at 6:33 PM

      In my derivation, it required assumptions outside the model. It's essentially a conservation law (of the value of goods or of demand) so I'd imagine it to be broken since it is unlikely there are any solid conservation laws in economics. It might be a good approximation in some cases.

      In the information transfer model, the information transfer efficiency can suddenly fall by different amounts in different markets.

      Delete
  4. Tom BrownMay 4, 2014 at 12:19 AM

    Just now read about your car accident! Shoot... sorry to hear that.

    ReplyDelete

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