Why the UK Productivity Puzzle seen from Micro Foundations is perhaps not so Puzzling After All
A sectoral analysis of the UK economy provides more granular evidence that Ben Broadbent’s assumption of labour hoarding and lower productivity growth currently impacting the UK economy is the most plausible explanation of the breakdown between rising employment and...Cochrane’s criticism of “Gordon on Growth”
See link to John Cochrane’s excellent response to Gordon’s recent paper. http://johnhcochrane.blogspot.co.uk/2012/08/gordon-on-growth.html In particular: ‘My impression of modern growth theory is that the economics of innovation production and...White’s Ultra Easy Monetary Policy and the Law of Unintended Consequences
Excellent paper from Bill White on evaluating the desirability of ultra easy monetary policy by weighing up the balance of the desirable short run effects and the undesirable longer run effects – the unintended consequences....Navigating the Business cycle: A New Approach to Asset Allocation
Although the returns on equities in the long run have been superior to those on bonds, equity returns remain extremely volatile due to the nature of the business cycle. Long-only investors attempting to minimise this volatility using indicators emanating from the...The End of Money and Wicksell’s Credit Revolution
Credit has too often been ignored by economists, mainly it seems because it is too complex to model. One of the main reasons why the new neo-classical synthesis – which forms the backbone of monetary policy today – failed to provide any indication of the financial crisis was because credit was largely omitted from its models.