thoughts

If I had the time and energy I'd learn more about the zero lower bound and Scott Sumner's problem with it.

Zero lower bound

The Zero Lower Bound (ZLB) or Zero Nominal Lower Bound (ZNLB) is a macroeconomic problem that occurs when the short-term nominal interest rate is at or near zero, causing a liquidity trap and limiting the capacity that the central bank has to stimulate economic growth. This problem returned to prominence with the Japan's experience during the 90's, and more recently with the subprime crisis. The belief that monetary policy under the ZLB was effective in promoting economy growth has been critiqued by Paul Krugman, Gauti Eggertsson, and Michael Woodford among others. Milton Friedman, on the other hand, argued that a zero nominal interest rate presents no problem for monetary policy. According to Friedman, a central bank can increase the monetary base even if the interest rate vanishes; it only needs to continue buying bonds.^[1] Other economists point out that there are more efficient ways to adjust the money supply.^[2][3]

EDIT: Simon Wren-Lewis on the ZLB.

I'd also look into the debate over Piketty's "r" or return on wealth. Critics say it will automatically go down as r slows. Apparently Piketty and others have the data which says it hasn't gone down as growth slows.

How does Piketty calculate "wealth" in the wealth to income ratio. Does he include liquid assets?

Also, since 1980 or so, growth has been 2-3 percent.* Piketty guesses it will slow in the future. Return on wealth has been 4-5 percent. Inequality has risen because wealth is concentrated.

1) are the critics saying that the return on wealth will come down as growth slows? What is their reasoning? 2) what were the growth rates and return on wealth during the Thirty Glorious Years of post-WWII social-democracy?

comment at DeLong's blog:

"Not according to Piketty. See table 2.5. From 1980 to 2012, annual growth in real GDP per head has been 1.7% globally, 1.8% in Europe, 1.3% in "America". There's a considerable element of embedded wishful thinking in the common assumption of much higher rates. In the US, this may be driven by the failure to allow for population growth."