tag:blogger.com,1999:blog-6837159629100463303.post2886157665184080584..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: Scooping the Financial TimesJason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6837159629100463303.post-39471323804370164362015-11-12T18:57:28.052-08:002015-11-12T18:57:28.052-08:00Jason,
"And you can't say interest rate ...Jason,<br /><br />"And you can't say interest rate doesn't move to bring equilibrium to S = I because S = I is an identity, but then say the level of income moves to bring equilibrium to S = I."<br /><br />I didn't say this in my previous but I would probably get around to say this. :-) <br /><br /><br /><br />"it's illogical."<br /><br />I haven't studied your IT model so I can't relate to the concepts and the language and so I can't see why you assert the illogicality.<br /><br />Your model may not fully characterize the functioning of a Keynesian system (I just don't know because I haven't studied it).<br /><br /><br />H.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-84258262095993518112015-11-12T18:23:35.450-08:002015-11-12T18:23:35.450-08:00I was referring to multiple equilibria, each with ...I was referring to multiple equilibria, each with its own 'natural rate'.<br /><br />And you can't say interest rate doesn't move to bring equilibrium to S = I because S = I is an identity, but then say the level of income moves to bring equilibrium to S = I.<br /><br />In information transfer model language, you can't say<br /><br />Δr : S ⇄ I<br /><br />is not an information equilibrium relationship because S ≡ I and then say<br /><br />Δy : S ⇄ I<br /><br />is an information equilibrium relationship. It's not really a matter of opinion; it's illogical.<br /><br />You have two choices there: either S ⇄ I or S ≡ I. It can't be both.<br /><br />Actually, I think this kind of thing is one of the best use cases of the information transfer framework. You can easily distinguish identities (A ≡ B) from functional relationships that are equal in equilibrium (A ⇄ B).Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-49918360435420503812015-11-12T18:08:32.027-08:002015-11-12T18:08:32.027-08:00Jason,
"Keynes did think there could be mult...Jason,<br /><br />"Keynes did think there could be multiple natural rates in his writing."<br /><br />I think you might be talking about "own rates", which are quite different from the monetary rate, at least from a Keynesian perspective.<br /><br />"However saying the natural rate was irrelevant was actually a mistake on his part."<br /><br />That's a matter of opinion. <br /><br />And in the current environment where economists, particularly those of the orthodox variety are fixated on interest rates and monetary policy, nothing else seems to be of relevance (and I'm not just talking about fiscal policy).<br /><br />Henry.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-32791460734329375982015-11-12T17:36:20.396-08:002015-11-12T17:36:20.396-08:00Keynes did think there could be multiple natural r...Keynes did think there could be multiple natural rates in his writing. However saying the natural rate was irrelevant was actually <a href="http://uneasymoney.com/2015/10/20/keynes-and-accounting-identities/" rel="nofollow">a mistake</a> on his part. However Keynesian economics does not just consist of '<a href="http://krugman.blogs.nytimes.com/2012/03/27/minksy-and-methodology-wonkish/" rel="nofollow">Talmudic scholars</a>' of Keynes, and so does not continue this mistake (otherwise it would be wrong -- the logical argument behind it would be false).<br /><br />"Keynesian" economics is a class of models where fiscal policy can have an impact on output. Modern Keynesian economics says that fiscal policy has an impact when the Wicksellian natural rate is negative. Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-25301142680464289992015-11-12T17:20:13.698-08:002015-11-12T17:20:13.698-08:00Imagine it as the last common ancestor of Austrian...Imagine it as the last common ancestor of Austrian, Keynesian and monetarist theories of economics.<br /><br />I would think it is more accurate to say that Keynes repudiated Wicksell's natural rate of interest.<br /><br />HenryAnonymousnoreply@blogger.com