Sunday, March 25, 2012

Lessons from the Great Canadian Slump by Krugman

A prolonged Output Gap does not necessarily entail deflation or falling inflation/disinflation.

A Bailout by Another Name by Gretchen Morgenson

Morgenson discusses Peter DeMarco and principle writedowns and differs from people I usually agree with. She feels to take up a number of issues like aren't taxpayers served by an economy growing at potential with no output gap? It is giving money to banks but it is also helping people deleverage by getting out from under underwater mortgages. Perhaps there would be some way for the banks to help pay, but I doubt the Republicans who control the House would go for it.

The Age of the Shadow Bank Run by Tyler Cowen

Cowen notes the success of the post-World Years II with FDIC preventing bank runs but suggest doing something similar today would create morale hazard. Basically he's anti-regulation. Weird aporia of a liberatarian.

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