Saturday, May 31, 2014

Post bump (understanding sticky wages and recessions)


I thought I'd give two neglected (IMHO, quality) posts a bump:
  • Sticky wages, information transfer and piece work (Feb 2014) This is an attempt to understand the origin of sticky wages and questions Roger Farmer's assertion that wages were flexible in the Great Depression.
  • The monetary base as a sand pile (Mar 2014) Some numerical differential equation solving and an analogy where NGDP is the height of a sand pile, the monetary base is the amount of sand and recessions are the inevitable avalanches that result as the height increases. Makes sense of these observations of NGDP.
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2 comments:

  1. Tom BrownJune 1, 2014 at 2:35 PM

    O/T: You might have something to add here:

    http://pragcap.com/economists-like-physicists

    ReplyDelete
    Replies
    1. Jason SmithJune 2, 2014 at 9:30 PM

      Thanks Tom. I'm not sure I have anything intelligent to add since I've never taken an economics class except in high school. I think Noah's proposal is great. However physics is different because its principles are well established. It seems all of economics should be reserved for grad school since it isn't very well established in a natural sciences way. Otherwise it should be taught like linguistics or psychology ... as a history of thought along with what's current in the journals.

      Delete

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