tag:blogger.com,1999:blog-6837159629100463303.post3669862549705686575..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: A list of unsupported narratives in macroeconomicsJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6837159629100463303.post-74055384030471183732016-11-15T18:05:44.336-08:002016-11-15T18:05:44.336-08:00I was only specifically calling out the Johnson/Ma...I was only specifically calling out the Johnson/Martin story because it's one of those parables people like to tell where dudes physically shoving each other around somehow have an impact on the world ... Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-91696669609191837932016-11-07T02:13:56.847-08:002016-11-07T02:13:56.847-08:00"The general takeaway is that macroeconomic t..."The general takeaway is that macroeconomic theory is not yet good enough empirically to support any particular story."<br /><br />This economist thinks his evidence supports a particular 'story'?<br /><br />Inductive methodology {as 'used' by the natural sciences and most scientific disciplines} is the basis of this economist's approach.<br /><br />"The critics of neoclassical economics agree that economics should be about economic reality and should be demonstrably relevant to it. This will strike the non-economist as obvious. However, it is not obvious in mainstream economic thinking: the neoclassical school of thought is based on the deductive approach. This methodology argues that knowledge is brought about by starting with axioms that are not derived from empirical evidence, to which theoretical assumptions are added (again not empirically backed), and on the basis of which tools of logic (mathematics) are utilized to prove theoretical results. There is an alternative approach. This approach examines reality, identifies important facts and patterns, and then attempts to explain them, using logic, in the form of theories. These theories are then tested and modified as needed, in order to be most consistent with the facts of reality. This methodology is called inductivism."<br /><br />http://www.palgraveconnect.com/pc/doifinder/view/10.1057/9780230506077 Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-45815279889112904012016-11-06T10:43:58.015-08:002016-11-06T10:43:58.015-08:00"The general takeaway is that macroeconomic t..."The general takeaway is that macroeconomic theory is not yet good enough empirically to support any particular story."<br /><br />Well worth repeating. :)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-9104312589202665332016-11-06T08:02:06.062-08:002016-11-06T08:02:06.062-08:00Regarding cause and effect, I just saw this short ...Regarding cause and effect, I just saw this short video (~3.5 min) from Sean Carroll last night:<br />https://www.youtube.com/watch?v=3AMCcYnAsdQ<br />Enjoy!Tom Brownhttps://www.blogger.com/profile/17654184190478330946noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-7425568429453705092016-11-06T04:55:08.029-08:002016-11-06T04:55:08.029-08:00
http://www.forbes.com/sites/johntharvey/2011/05/1...<br />http://www.forbes.com/sites/johntharvey/2011/05/14/money-growth-does-not-cause-inflation/4/#6e38191ef9f8<br />Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-4129278712507469652016-11-06T04:54:13.564-08:002016-11-06T04:54:13.564-08:00"There were two major real shocks that plausi..."There were two major real shocks that plausibly contributed to inflation (the oil crises of 1973 and 1979)."<br /><br />"As already mentioned, the most important inflationary episode in post-WWII history was that during the 1970s and early 1980s. From 1968 through 1972, consumer price inflation averaged 4.6%. Over the next ten years it was 7.5%. What happened? What caused this sudden and dramatic acceleration in prices? Did the Fed accidentally print too much money? As already explained, that can’t happen–you simply can’t raise the money supply above the demand. M did rise, however, and largely proportionally to the increase in P. This is a much more realistic story of those events.<br /><br />As the price of oil skyrocketed, so costs of production rose for many, many US businesses. Because there is a lag between purchasing inputs and selling output, most firms have to borrow money (working capital) to bridge the gap. As the ripple effect of the OPEC price increases moved throughout the economy, the demand for cash by these businesses rose. Quite reasonably, private banks and the Fed did what they could to accommodate. These were fair requests on the part of US entrepreneurs. Loans were extended and government debt sold by the private sector to the central bank. This raised the supply of money. Therefore, the rising prices led to an increase in the supply of money and not the other way around." Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-1292833396943364982016-11-05T16:29:45.988-07:002016-11-05T16:29:45.988-07:00Ha!
The scourge of high employment will not hurt ...Ha!<br /><br />The scourge of high employment will not hurt us anymore!<br /><br />I'll fix it :)Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-80334133507358004622016-11-05T16:28:19.523-07:002016-11-05T16:28:19.523-07:00"The story goes that inflation and high emplo..."The story goes that inflation and high employment in the 1970s..."<br /><br />I think you're missing an "un" before employment...John Handleyhttps://www.blogger.com/profile/16057855086740377031noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-55260997622658287652016-11-05T16:27:40.723-07:002016-11-05T16:27:40.723-07:00"Coupled with Johnson bullying of Fed chair M..."Coupled with Johnson bullying of Fed chair Martin to keep interest rates low, the country ended up with inflation."<br /><br />Not to forget to mention the Nixon/Burns contribution in the late 60s and early 70s - the neoliberals tend to neglect that one all too easily.<br /><br />Johnson put the car in gear and Nixon/Burns flattened the accelerator (except that Burns tried to put the hand brake on with a prices and incomes policy).Anonymousnoreply@blogger.com