tag:blogger.com,1999:blog-6837159629100463303.post8901654576390181122..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: The interest rate in the information transfer modelJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6837159629100463303.post-77429094139798272432014-05-12T12:57:35.204-07:002014-05-12T12:57:35.204-07:00Great question! I don't think I ever really ex...Great question! I don't think I ever really explained that anywhere on the blog. The price level model P:NGDP→MB takes both information source (NGDP) and destination (MB) to be "endogenous" while the interest rate model r:NGDP→MB takes the information source and destination to be "exogenous" (they come from outside the model).<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2013/10/exogenous-and-endogenous.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2013/10/exogenous-and-endogenous.html</a><br /><br />Additionally, the equation Price = (1/k) (Demand/Supply) should hold generally (the "endogenous" solution just takes "Demand" to be "Supply^1/k").<br /><br />There is another piece: the constant c above doesn't come from anywhere and is something I'm still trying to figure out:<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2014/03/unsolved-problems-in-information.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2014/03/unsolved-problems-in-information.html</a>Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-19529640741371261872014-05-12T09:44:44.295-07:002014-05-12T09:44:44.295-07:00Sorry, I'm not quite sure how you end up with ...Sorry, I'm not quite sure how you end up with the equation for r. Based on r:NGDP->MB, isn't the equation for r = dNGDP/dMB = 1/k (NGDP/MB) - which should net you the exact same form as P:NGDP->MB (P = 1/k (MB/Mo)^(1/k-1))?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-60545210236867490672013-08-26T08:27:03.129-07:002013-08-26T08:27:03.129-07:00I mention "integrating ... the IS-LM model an...I mention "integrating ... the IS-LM model and the quantity theory" at the top of the post. Brad DeLong has a great description of how these models relate:<br /><br />http://delong.typepad.com/sdj/2012/03/the-changing-multiplier-since-1925.html<br /><br />One way to think about the second to last graph is that it plots out the changing LM curves DeLong describes.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-55464202431194084372013-08-26T00:07:39.881-07:002013-08-26T00:07:39.881-07:00By "cool" I meant "heat"; orig...By "cool" I meant "heat"; originally wrote the sentence referring to the rising LM curves ...Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.com