tag:blogger.com,1999:blog-6837159629100463303.post3385852124895418658..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: Does a liquidity trap ever end?Jason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-6837159629100463303.post-44303983187839122442015-06-14T19:55:43.469-07:002015-06-14T19:55:43.469-07:00That is definitely a worry -- the best time for in...That is definitely a worry -- the best time for income equality was in the period of high inflation in the mid 20th century. I don't know enough history to really understand the political economy implied by the information equilibrium model.<br /><br />However if the info. eq. model is correct, the Fed's tightening in response to wage increases won't do much of anything. Although it also probably means that the wage increases will have been the result of a statistical fluctuation.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-4990476135000589172015-06-14T19:45:24.587-07:002015-06-14T19:45:24.587-07:00Well I am concerned about a regime of low inflatio...Well I am concerned about a regime of low inflation increasing socio-economic ossification. Is it a coincidence that the Great Moderation has been a period of increasing inequality? The Fed made no secret of tightening in response to wage increases. <br /><br />While Americans in the early 1800s generally regarded the US as a democratic republic, Southern culture was based upon a landed gentry, which modeled itself after the French Bourbon aristocracy. Although the deep south is still dirt poor, the aristocratic impulse has been reawakened. Perhaps the new model will be the banana republic. Stay tuned.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-7009177674262788052015-06-09T16:25:32.110-07:002015-06-09T16:25:32.110-07:00Hi Bill,
Yes, hyperinflation, wars, history in ge...Hi Bill,<br /><br />Yes, hyperinflation, wars, history in general can intercede -- but that involves pegging interest rates or literally buying stuff with printed currency. If central banks keep an eye on markets, then inflation will trend downward (unless monetary expansion trends upward). At least in the information transfer model.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-90009365181822017252015-06-09T02:14:33.025-07:002015-06-09T02:14:33.025-07:00Liquidity trap forever? I don't think so.
Som...Liquidity trap forever? I don't think so.<br /><br />Some years ago I read an account on the internet -- it may well be apocryphal --, about a man who had performed some service for one of the medieval Louises of France and had been rewarded with a generous pension which enabled him to live well, and which he could bequeath to his heirs. At some point over the centuries and regime changes the record of it had gotten lost, but had been found in the 1990s. The French government was by law required to honor the pension. An heir, a woman, had also been located and notified by the government. However, she never claimed it because it was now worth less than one Euro per year.<br /><br />Historically, governments have permitted inflation and "debasement" of the currency. Who wants to be bound by the promise of some long dead French king? Inflation is a graceful way of letting the dead bury the dead.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-80430982823457216722015-06-05T20:47:17.212-07:002015-06-05T20:47:17.212-07:00Thanks, Todd.
And I'd generally agree. I like...Thanks, Todd.<br /><br />And I'd generally agree. I like the universal basic income idea because it is simple but as I'm not a politician, I have no idea what really flies with the public the best ... and so I'm not adverse to a collection of good ideas.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-31429654534354794752015-06-05T20:32:25.179-07:002015-06-05T20:32:25.179-07:00I would agree that directly hiring people would af...I would agree that directly hiring people would affect the number of people employed -- in fact it did for the census:<br /><br /><a href="https://research.stlouisfed.org/fred2/graph/?g=1dBR" rel="nofollow">https://research.stlouisfed.org/fred2/graph/?g=1dBR</a><br /><br />My policy comment above was more about monetary and fiscal stimulus and really only looked at post-war data ... I was actually shocked at the regularity of recession recovery in terms of unemployment ...<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2014/07/remarkable-recovery-regularity-and.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2014/07/remarkable-recovery-regularity-and.html</a>Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-66185382856745546062015-06-05T12:19:14.930-07:002015-06-05T12:19:14.930-07:00Best post ever, Jason! Now that I have been readin...Best post ever, Jason! Now that I have been reading the blog for a while, I don't need to be convinced that an information transfer approach can be useful to describe economic indicies. Now I want to hear about what policy implications this has. Clearly, activist governmental fiscal policies are the prescription, IMHO: job vs. income guarantee programs, improved unemployement insurance, beefed up social security, increased public spending on infrastructure projects.Todd Zorickhttps://www.blogger.com/profile/10976192775890569092noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-26521711024626161582015-06-05T11:40:29.534-07:002015-06-05T11:40:29.534-07:00Gee, the goverment hired people during the Great D...Gee, the goverment hired people during the Great Depression. That ought to reduce the unemployment rate. (But I guess that government jobs don't count, eh? I like how both Romney and Obama agreed that the government doesn't create jobs while they were trying to get a government job. ;))Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-33392066425990236862015-06-05T08:43:50.032-07:002015-06-05T08:43:50.032-07:00By that I mean there seems to be nothing that anyo...By that I mean there seems to be nothing that anyone can do to bring down the unemployment rate ... there are still things that can make living with a high unemployment rate much more tolerable (like unemployment insurance).<br /><br />But 26 weeks of unemployment compensation doesn't raise the unemployment rate, online job ads don't reduce search costs/timelines, etc ... nothing seems to impact the rate at which unemployment falls after a recession.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-11029422633340200372015-06-05T08:39:35.554-07:002015-06-05T08:39:35.554-07:00Actually, I wrote this awhile back questioning whe...Actually, I wrote this awhile back questioning whether any kind of policy (or technology) has any effect at all ...<br /><br /><a href="http://informationtransfereconomics.blogspot.com/2014/07/remarkable-recovery-regularity-and.html" rel="nofollow">http://informationtransfereconomics.blogspot.com/2014/07/remarkable-recovery-regularity-and.html</a>Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-24485387592113855852015-06-05T03:44:29.916-07:002015-06-05T03:44:29.916-07:00Monetary policy seems like a lousy tool even durin...Monetary policy seems like a lousy tool even during "normal times". Looking at past data, it seems that each time it took at least 3 years for unemployment to go from peak to trough after a recession, even when the monetary policy response was very aggressive.<br /><br />So some people should agree to be unemployed for 3 years because the alternative is government intervention aka fiscal policy aka politics?Mnoreply@blogger.com