End January Links

Why the multiplier doesn't matter - A great post from Noah Smith on why we should be investing in infrastructure irrespective of Keynesian effects.
Avoiding the B word - and goverments should proudly tell the world they're BORROWING (so that everyone else can pay off their debt)

Up from Here? Panel discussion on ‘The Impediments to Recovery’ with K. Arrow, R. Gordon, E. Laursen and Y. Varoufakis - the `What should we do' section is worth copying: "

1. End the banks’ incentives to profit from the deposit-loans gap.
2. A coordinated program for private debt reduction (a QE for the masses as my friend and colleague Steve Keen puts it).
3. Coordinated spending programs at G20 level – toward a Global Manhattan Project for Green Energy.
4. Working toward labour intensive health and education sectors.
5. Establish a WTO-like framework for recycling surpluses at a planetary scale"

Don't entirely understand no.1 but the others have my 100% agreement (no.4 is to do with the `Rise of the robots' post of Krugman linked to in December).
Do we ever rise from the floor? Steve Randy Waldman summarises an interesting debate (with Krugman & presumably with the "MMT'ers") on central banking in the post-QE era, related to the economic effects of the central bank paying interest on reserves held by the commercial banks. US focussed, not sure what the BoE does.
Zero emission synfuel from seawater - this sounds amazing! And also good is ITER gets a home.
The state as risk manager - interesting stuff, and I think that this is the right way to think about things. Unfortunately, I don't believe that many of the general public view state benefits as insurance, but rather as something that other people not like them get.
Inequality and demand - another fantastic post from Steve Randy Waldman in which he again trumps Krugman
Scottish science is ready to go it alone - interesting interjection to the independence debate in Nature

 

And this is a bad thing?

"The thousands of turbines in operation, being built or in the planning stage, mean that Scotland will easily overshoot its electricity target" says Tory MEP Struan Stevenson. Sounds good? No, apparently this is a bad thing: "The march of the wind farms under Alex Salmond and the SNP has to be brought to a halt."

And I thought one of the major problems with wind as far as the likes of Struan Stevenson was concerned was that they couldn't deliver. Now that it's clear that they can deliver the generation capacity, the issue is switched to them not being the lowest cost option. We already knew that though. The point is that we either have to be willing to pay for low carbon generation, or we have to put a price on carbon such that fossil alternatives aren't the lowest cost.

Unless you also happen to be a climate change denier. Stevenson's collegue Murdo Fraser claims to want to be evidence-led: "But as with all new technologies, we must be evidence-led in exploring the best and safest routes of development". So is it only the evidence that dirty fossil fuels may also be currently the cheapest option that counts, or can we add evidence for the cost of the long term harm they'll cause?

Is the end in sight?

Not blogged for ages: planning to submit my PhD thesis very shortly. The first 2 chapters are:
A balance of questions: what can we ask of climate change economics?
The interaction of scale economies and energy quality

The third chapter is almost complete and will be drafted this week.

End December Links

Is it a sin for the central bank to help reduce debt?
The multiplier is at least two

Interesting stuff (from Krugman and Nick Rowe) on wage shares & capital biased technical change (which combined with observed low interest rates implies either payments to some other factor or monopoly rents): Robots and Robber Barons, Rise of the robots, Capital-biased technical change vs low interest rates? Technology or monopoly power? Technology and wages, the analytics (wonkish), Human versus physical capital, Production of robots by means of robots

This post is also on the same topic but from a heterodox view, Krugman promoting zombie horror, not SF futures. I need to read and understand this stuff.
And Chris Dillow has related stuff: On wage and profit shares & Inequality: power vs human capital

I like attempts to make links and/or analogies between economics and biology/ecology: Darwin = Malthus + Sebright? Diffusion of technical change

And I like this Macroeconomic Resilience guy: An experiment

Chris Dillow discusses "welfare cycles". I'm (semi-) working on a paper that has something similar.
Adam Posen's not pulling any punches: What is wrong with the UK economy?
This is good: Mistaking models for reality
Amidst all the criticisms of macroeconomics, I agree with this defence: Expectations and first approximations