Deflation, Overcapacity, and Low Demand Incentivize War

People who live in the U.S. are world-famous for throwing lots of stuff away. When we have too much, we just throw it in the garbage. But what if this too much happens on the level of the entire society? We are living in a world right now where we have too much on a […]

Debasement? Not so much

One of the continual complaints about fiat money is the complaint about debasement. “Fiat money has lost 98% of its value if you take into account inflation” – this is something you’ll hear from gold bugs like Peter Schiff nearly every time they open their mouths. I had a brief twitter interaction with Steve Waldman […]

NGDP Targets in the 90′s would have meant lower Growth

It sure seems like a 5% NGDP target would have meant lower growth in the 1990, without much benefit in terms of containing inflation. Inflation was low in the 1990′s. Most of the decade saw inflation under 3%. This low rate was considered a huge success in real time commentary. Real GDP is the difference […]

What is definition of the Natural Rate of Interest?

zanon asked a good question: “what is your definition of “natural rate” of interest?”   This is more from the research I did a while back. The Natural Rate Defined  There are lots of different meanings for the words natural rate of interest. For the purposes of this extended rant reasoned critique, I am using […]

Estimating the Natural Rate of Interest

This is part of the research I did a while back on the natural rate of interest. One of the more interesting facts I uncovered in this research is it’s extremely difficult to know what the NRoI was even in the past. You’d think the most important interest rate in the economy – the interest […]