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Blanchard’s “Policy Model” v “Theory Model”

Back in November last year, Professor Olivier Blanchard discussed with me about his view that there should be four types of macroeconomics, and "theory models" like DSGEs is just one of them. Here is...
Raghuram Rajan at AFF 2017

Rajan on what “New Rule for Monetary Game” actually means

Raghuram Rajan, former Governer of Reserve Bank of India and now Professor of Finance at Chicago Booth, visited Hong Kong and gave a keynote speech in Asian Financial Forum last week. I am lucky...

What do others think about Paul Romer’s worries… (II)

The discussion on Paul Romer's "The Trouble with Macroeconomics" continues in the blogosphere, and Simon Wren -Lewis's "Paul Romer on macroeconomics" is one of the Must-Reads.In his comments, Wren-Lewis said that Romer's view is...

Aging, Output Per Capita and Secular Stagnation

Gauti B. Eggertsson, Manuel Lancastre, and Lawrence H. Summers explain in their paper "Aging, Output Per Capita and Secular Stagnation" the role of aging in the Secular Stagnation model.

What is Payment on Reserves Process?

The payment on reserve process proposed by Robert Hall and Ricardo Reis is a way of remunerating reserves which would give the central bank better control over the price level.The basic intuition is that...

What is FTPL (Fiscal Theory of Price Level)?

The Fiscal Theory of the Price Level says that money has value because the government accepts it for taxes, and inflation is fundamentally a fiscal phenomenon

Bernanke on Trump’s Fiscal Policy 

Ben Bernanke has a new blog post on Brookings. The focus of the post is to explain "the large difference between the reactions of the Fed and the markets to the change in fiscal prospects since the election"

Central Bank’s Balance Sheet and the Rise of Reserves

The above figure shows the balance sheet of four major central banks from 2005 to 2015. Above the horizontal axis is the asset side of the balance sheet, below is the liability side. All...

What is Hysteresis?

Hysteresis is referred to the hypothesis that recessions may have permanent effects on the level of output relative to trend.

Why Negative Rate is a better policy tool to Higher Inflation Target? Bernanke Explains…

In his latest Brookings blog post "Modifying the Fed’s policy framework: Does a higher inflation target beat negative interest rates?", Ben Bernanke compares two policy tools central banks can use to stimulate the economy...

Global Economy

Interviews

Kocherlakota Cover photo

How to Reform the Federal Reserve System? | Q&A with Kocherlakota |

Welcome to the latest installment of our interview series “Where is the General Theory of the 21st Century?”“Where is the General Theory of the...
John Cochrane Cover Photo

Fiscal Theory of Price Level and State of Macroeconomics | Q&A with John Cochrane...

John Cochrane talks about Fiscal Theory of Price Level and how can we apply this theory on the current macroeconomy.

How Household Debt affect the Global Business Cycles | Q&A with Atif Mian |

In this installment of the interview, Professor Mian explains the major findings in his recent research paper "Household Debt and Business Cycles World Wide" and the important implications of that paper.
The Midas Paradox Cover

Midas Paradox and the Great Depression | Q&A with Scott Sumner |

Welcome! This is the first installment of our interview series "Where is the General Theory of the 21st Century?""Where is the General Theory of...