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The Turkish demonstrations - and the usefulness of the AS/AD framework

The Turkish demonstrations - and the usefulness of the AS/AD framework

Peter Dorman has a blog post that have gotten quite a bit of attention in the blogosphere on the AS-AD model and why he thinks it is not a useful framework. This is Peter:

Scott Sumner: "It's Complicated: The Great Depression in the US"

Scott Sumner: "It's Complicated: The Great Depression in the US"

Yesterday I was surfing the internet for some information on events in 1937 - the year of the Recession in the Depression. While doing that I found a great lecture Scott Sumner did at Oxford Hayek Society in 2010.

The OECD understands the Sumner Critique - Europe's problem is monetary

The OECD understands the Sumner Critique - Europe's problem is monetary

This is from OECD's Economic Outlook report published earlier today:

When US 30-year yields hit 5% the Great Recession will be over

When US 30-year yields hit 5% the Great Recession will be over

US bond yields are spiking today. You might expect me to celebrate it and say this is great (while everybody else are freaking out...) Well, you are right - it doesn't worry me the least bit.

A few words that would help Kuroda hit his target

A few words that would help Kuroda hit his target

The developments in the Japanese financial markets over the past week has caused a lot of debate about the sustainability of the "Kuroda shock". It is particularly the rise in nominal bond yields, which seems to have shaken some Japanese policy makers.

Japan badly needs structural reforms, but not more than the rest of the G7 countries

Japan badly needs structural reforms, but not more than the rest of the G7 countries

A key critique of monetary easing in Japan is that Japan's real problem is not monetary, but rather a supply side problem. I strongly agree that the Japanese economy is facing serious structural challenges - particularly an old-age population and a declining labour force. However, I also think that there often is a tendency for commentators to overstate these problems compared to supply side problems in other developed economies.

Two cheers for higher Japanese bond yields (in the spirit of Milton Friedman)

Two cheers for higher Japanese bond yields (in the spirit of Milton Friedman)

I have no doubt that Milton Friedman would have congratulated Bank of Japan governor Haruhiko Kuroda on the fact that Japanese bond yields continue to rise.

How to avoid a repeat of 1937 - lessons for both the fed and the BoJ

How to avoid a repeat of 1937 - lessons for both the fed and the BoJ

The Japanese stock market dropped more than 7% on Thursday and even though we are up 3% this morning there is no doubt that “something” had scared investors.

Japan: It's domestic demand, stupid

Japan: It's domestic demand, stupid

I have been reading the reports on the Japanese trade data for April, which have been published this morning. The reporting is extremely telling about how most journalists (and economists!) fail to understand what is going on in Japan (the markets understand perfectly well - Nikkei is nicely up this morning).

BIS is fearful of bubbles, but is not always right (remember the gold standard?)

BIS is fearful of bubbles, but is not always right (remember the gold standard?)

I think there is a bubble in bubble fears. This is particularly the the case for central bankers and institutional monetary institutions.

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