"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen


"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister


"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont


"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister


"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Saturday, November 16, 2013

bubbles (updated)

Secular Stagnation, Coalmines, Bubbles, and Larry Summers by Krugman

Bubbles Are Not Funny by Dean Baker

Bubbles, Regulation, and Secular Stagnation by Krugman (Sept. 25, 2013)

Need to increase demand to achieve full employment without bubbles or above moderate inflation. Inflation will help with deleveraging. Increase demand via more exports. Via monetary policy (see Abenomics). Via fiscal policy. State and local governments are now small tailwind. Federal has the sequester but deficit/debt no longer and issue so probably less austerity going forward. Via supply (shorter hours) and organized labor.


Borgen & The Returned

AV club reviews "The Drop" from Borgen

AV club reviews "Julie" from The Returned

Mogwai. Scotland and France, like Reign.


Rand Paul's Fed audit

Here’s what’s wrong with Rand Paul’s ‘Audit the Fed’ bill by Mike Konczal


2014

The good news for 2014 is that those headwinds--the ones we know about--are already priced in. U.S. government spending cuts and tax hikes took place, but there aren't likely to be additional ones next year. Emerging markets continue on their moderate growth path, but there doesn't seem to be a collapse in activity. Europe's problems may have finally bottomed out, and its sense of acute crisis has long passed.

In other words, the forseeable things that dragged down growth the last few years look unlikely to recur. So the good news is that the natural resilience of the world's leading economies should have a greater ability to assert itself, driving the kind of expansion embedded in projections from the IMF, the Fed, and presaged by the new OECD numbers. 
State and local governments are a slight tailwind. 

Many false dawns however, as Irwin notes. How hard did the sequester hit the economy?

Thursday, November 14, 2013

German current account balance updated linklist

One list to rule them all! (updated)

German Trade Balance Isn't About Hard Work by Yglesias
Nov. 14, 2013

Europe’s (Low) Inflation Problem by Krugman
Nov. 13, 2013 9:15 p.m.

German Economists Exist to Make Economists Elsewhere Look Good by Dean Baker
Nov. 13, 2013 14:59

In a Good World, Would We Have to Deal with “Global Imbalances”? by DeLong
Nov. 13, 2013  7:45 a.m.

Germany’s Neighbors Admonish It Over Surplus
Nov. 13, 2013

Pressure Is on Germany to Narrow Its Trade Gap
Nov. 12, 2013

Germany’s Lack of Reciprocity by Krugman
Nov. 12, 2013 1:26 a.m.

Europe’s Macro Muddle (Wonkish) by Krugman
Nov. 11, 2013

Sadowski on sterilization
Nov. 4 at 1:34 pm

How Do Those Germans Do It and What Does it Mean for the US? by Jared Bernstein
Nov 04, 2013 at 12:12 pm

China and the EU: Beggaring Neighbors by Dean Baker
Sunday, 03 November 2013 16:26

Eureka! Paul Krugman Discovers the Bank of France by David Glasner
November 3, 2013

The real problem with German macroeconomic policy by Simon Wren-Lewis
Sunday, 3 November 2013

Blame Germany, or Frankfurt? by Ryan Avent
Nov 3rd 2013, 21:41

Europe’s Inflation Problem by Krugman
November 4, 2013, 10:20 am 

The Changing Geography of Beggar-thy-Neighbor by Krugman
November 3, 2013, 3:16 pm

German Surpluses: This Time Is Different by Krugman
November 3, 2013, 6:41 am

Those Depressing Germans by Krugman
November 3, 2013

Is the Paradox of Thrift Actually a Paradox? by Henry Farrell
Nov. 2, 2013

France 1930, Germany 2013 by Krugman
November 2, 2013, 6:00 pm

Sin and Unsinn by Krugman
November 2, 2013, 4:35 pm 

Germany's Export Obsession Is Dooming Europe to a Depression by Matt O'Brien
Nov 2 2013, 9:30 am

Defending Germany by Krugman
November 2, 2013, 9:23 am

Fawlty Europe: Will the European Commission dare to utter the unmentionable to the Germans? by Charlemagne (The Economist)
Novemeber 2, 2013

More Notes On Germany by Krugman
November 1, 2013, 4:54 pm

The Harm Germany Does by Krugman
November 1, 2013, 11:41 am

Germany’s Blind Spot by New York Times Editorial Board
October 31, 2013

Raw Nerve: Germany Seethes at US Economic Criticism  By Christopher Alessi (Spiegel Online)
October 31, 2013 – 06:26 PM 

U.S. Accuses Germany of Causing Instability by Sarah Wheaton
October 30, 2013

Semiannual Report on International Economic and Exchange Rate Policies by U.S. Treasury
October 30, 2013

Yellen Senate hearing

The Yellen Doctrine: Robust Growth Is the Priority, but Bubbles Matter by John Cassidy

Janet Yellen should worry GOP policy elites. A lot. by Ryan Cooper


Hard Money Senators' Big Contradiction by Yglesias


Yellen

Three Interesting Points From Janet Yellen's Testimony by Yglesias

Yellen to Back Stimulus Plan in Remarks to Senators by Binyamin Appelbaum


Germany and global imbalances

German Economists Exist to Make Economists Elsewhere Look Good by Dean Baker
Nov. 13, 2013

Europe’s (Low) Inflation Problem by Krugman
Nov. 13, 2013

Germany current account balance linklist

Part of why this is coming up is that Merkel and the Christian Democrats are in negotiations to form a coalition government with the Social Democrats who are demanding concessons.

academic economics, old and new Keynesian theory

 Keynesian Economics and the Journals by Krugman
So consider two hypotheses. One — which Cochrane appears to believe — is that being inside the Beltway has rotted Janet’s and Olivier’s brains, not to mention that of all their researchers, causing them to revert to primitive concepts that “everyone” knows are false. The other — which is what I hear from young economists — is that there is an equilibrium business cycle claque in academic macroeconomics that has in effect blockaded the journals to anyone trying to publish models and evidence that stress the demand side.

Obviously you know which story I believe. The main point, though, is that trying to argue from authority is even sillier here than in most situations. There’s a huge difference between “nobody believes that” and “none of my friends will let that get published in the journals they control”.

Oh Dear: Megan McArdle Relies on John Cochrane, and so Goes Badly Astray… by DeLong

How to be a New Keynesian and an Old Keynesian at the same time by Simon Wren-Lewis


QE

Don't shoot the messenger by Joseph Gagnon


Wednesday, November 13, 2013

Yellen and inequality

Some analysts see these shifts as relatively inconsequential. They argue that Ms. Yellen would retain the strongest hand in setting the Fed’s course, and that tapering asset purchases would be a sufficient concession to maintain a majority.

“The institutional momentum is there even as the people in the chairs change,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.

Ms. Swonk said the new voices probably would cause some confusion, but “it increases uncertainty more than it changes the course of monetary policy.”

Rethinking the Rise of Inequality by Eduardo Porter

Inequality: The Democrats' Next Frontier by Yglesias

global imbalances

In a Good World, Would We Have to Deal with “Global Imbalances”? by Brad DeLong

German Economists Join Country’s Chorus of Critics

Pressure Is on Germany to Narrow Its Trade Gap


other links

Summers

People Opposed Summers Because He Helped Give Us an Over-Valued Dollar and Massive Trade Deficit by Dean Baker

Governor of the Bank of England

Mark Carney: "the glass is half full, the recovery has taken hold"

Monday, November 11, 2013

Yellen-Greenspan

Izabella Kaminska at FT Alphaville:

Greenspan’s dilemma revived, by Izabella Kaminska: Deficit continues to be a dirty word in the US..., whilst the idea that the US is an unsustainable deficit spender increasingly propagates in mainstream circles.
But, as Ethan Harris at Bank of America Merrill Lynch shows on Monday, nothing could be further from the truth. In reality the US deficit is contracting at a relatively speedy rate... And, bar the employment situation..., all of this comes in the context of an ever more quickly reviving economy...

Which leaves the following as the most notable point being made by Harris, in reference to the natural unemployment rate (NAIRU):
    If inflation persists below 1.5%, we would expect the interest rate forecast to drop further. We also expect the FOMC to cut its unemployment rate guidepost for hiking rates from 6.5% to 5.5% or lower. Ultimately, the Fed may decide to “overshoot” the inflation-neutral NAIRU to force inflation back up to target.
This in itself could become ever more crucial in the months to come. In short, it echoes exactly the same sort of dilemma Alan Greenspan faced all the way back in 1996. Do you raise rates despite little obvious inflationary pressure and risk stagnating growth? Or do you give the notion of a “new economy” — the idea that technological change is fuelling a boom in productivity and alleviating inflationary pressures — the benefit of the doubt?

Janet Yellen, it must be said, is uniquely positioned to make that call if she is confirmed. Not only was she there the first time around, she may have had more input on Greenspan’s ultimate decision than many remember. Call it something akin to mea culpa dotcom crash hindsight. 


Europe/Germany

Europe’s Macro Muddle (Wonkish) by Krugman
One last point: the Germans are very proud of their own adjustment between the late 1990s and 2007, during which they emerged from economic doldrums and became very competitive. But that adjustment, from a European point of view, looked like my first figure: German belt-tightening was accompanied by what amounted to a highly expansionary monetary policy, which led to fairly high inflation in Southern Europe. So when Germany asks why other countries can’t do what it did, it isn’t just forgetting that we can’t all run trade surpluses; it’s also insisting that other countries replicate its success while denying them the kind of external environment that made its success possible.

updated German current account surplus link list

original link

Edit: added
Europe’s Macro Muddle (Wonkish) by Krugman
Nov. 11, 2013

Sadowski on sterilization
Nov. 4 at 1:34 pm

How Do Those Germans Do It and What Does it Mean for the US? by Jared Bernstein
Nov 04, 2013 at 12:12 pm

China and the EU: Beggaring Neighbors by Dean Baker
Sunday, 03 November 2013 16:26

Eureka! Paul Krugman Discovers the Bank of France by David Glasner
Published November 3, 2013

The real problem with German macroeconomic policy by Simon Wren-Lewis
Sunday, 3 November 2013

Blame Germany, or Frankfurt? by Ryan Avent
Nov 3rd 2013, 21:41

Europe’s Inflation Problem by Krugman
November 4, 2013, 10:20 am 

The Changing Geography of Beggar-thy-Neighbor by Krugman
November 3, 2013, 3:16 pm

German Surpluses: This Time Is Different by Krugman
November 3, 2013, 6:41 am

Those Depressing Germans by Krugman
Published: November 3, 2013

Is the Paradox of Thrift Actually a Paradox? by Henry Farrell
Nov. 2, 2013

France 1930, Germany 2013 by Krugman
November 2, 2013, 6:00 pm

Sin and Unsinn by Krugman
November 2, 2013, 4:35 pm 

Germany's Export Obsession Is Dooming Europe to a Depression by Matt O'Brien
Nov 2 2013, 9:30 am

Defending Germany by Krugman
November 2, 2013, 9:23 am

Fawlty Europe: Will the European Commission dare to utter the unmentionable to the Germans? by Charlemagne (The Economist)
Novemeber 2, 2013

More Notes On Germany by Krugman
November 1, 2013, 4:54 pm

The Harm Germany Does by Krugman
November 1, 2013, 11:41 am

Germany’s Blind Spot by New York Times Editorial Board
October 31, 2013

Raw Nerve: Germany Seethes at US Economic Criticism  By Christopher Alessi (Spiegel Online)
October 31, 2013 – 06:26 PM 

U.S. Accuses Germany of Causing Instability by Sarah Wheaton
October 30, 2013

Semiannual Report on International Economic and Exchange Rate Policies by U.S. Treasury
October 30, 2013

Sunday, November 10, 2013