tag:blogger.com,1999:blog-6837159629100463303.post4719057841668505839..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: Abstract and notes for Ignite Seattle talkJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6837159629100463303.post-60696185384857811962014-11-27T10:20:48.105-08:002014-11-27T10:20:48.105-08:00Hi Todd,
If you're referring to the price le...Hi Todd, <br /><br />If you're referring to the price level vs M0 graph above, in the model, that graph actually has a much higher variance than the NGDP vs M0 graph as seen here:<br /><br />http://informationtransfereconomics.blogspot.com/2014/06/output-and-price-level-behavior-across.html<br /><br />The black dashed lines are averages (expectation values) over economies made of random markets assuming growth rates are uniformly distributed. The calculation is not intended to be a precision model, but rather an illustration of how such a simple model can incorporate the "essential economics" ... I'd still use the US model to describe the U.S. And the Japan model to describe Japan.<br /><br />If you are referring to the curve at the bottom of the post, the spikes in inflation match up with the oil crises in the 1970s which represents "coordination" so the market isn't behaving like a random ensemble of markets. In the information transfer model, that is a separate mechanism from trend inflation.<br /><br />And it's definitely true M0 doesn't capture everything ... I(S) = I(D) doesn't capture everything and sometimes I(S) < I(D) which seems to characterize market failures, financial crises and recessions.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-89347076001127641502014-11-27T08:56:11.478-08:002014-11-27T08:56:11.478-08:00Very cool and I continue to be a fan. However, I a...Very cool and I continue to be a fan. However, I am struck that the second graph on prices above shows that the U.S. at least is rather far from your model historically. I still can't help thinking that M0 is the best measure you have for information transfer capacity of the economy, but that it is not quite what is truly going on. Todd Zorickhttps://www.blogger.com/profile/10976192775890569092noreply@blogger.com