Author Archives: admin

The conclusion to Alarming errors in “Lessons” from the 1930s had a glaring error — now fixed! Perhaps it’s Freudian. It should read: More broadly, the threat to global prosperity is not the use of too much stimulus but too little. If we one day find ourselves in a more protectionist world, it won’t be […]

Partly for reasons of space, but more because I am cautions of repetition. My sense is the consumers of these analytical papers remain to be convinced how much relevance prior downturns, the Great Depression, and history in general have for today. That’s OK with me; I used to be of a similar view. Today’s brief is […]

Whether you’re from a left or right perspective, you can probably agree that policymaking played some role in the Great Depression. If you’re of a right/libertarian view you might see policymakers as having lacked the mettle to force the economy into a deflated-price equilibrium (or, more accurately, to force the factors of production (pdf) to accept new equilibria) […]

Angel Gurría explained this morning that protectionism is the real and present danger facing the world economy, citing the 1930s as an object lesson. This view no doubt enjoys considerable support. It is practically a ‘stylised fact’ in our historiography of the Great Depression (was the Smoot-Hawley tariff not in your high school textbook?). It […]

My house had a problem with pigeons nesting in the chimney. Sometimes we’d come home to find one sitting on the couch. On one such occasion I could hear the bird in the chimney. To keep it from coming into the living room (and having to deal with its mess), I decided the easiest thing […]

Money’s key function is means of exchange (beats bartering). Most money is created by the financial system. When it creates a loan, ‘new’ money is created. (A new entry is created in the asset ledger of the financial institution, which is the loan that you need to repay. A similar entry is created on the […]

If you can access it, be sure to read Predictions of a Bond Market Bubble are Wrong, by David Rosenberg writing in today’s FT. It clarifies much confusion about the inflation/deflation outlook and is consistent with the periodic emphasis here on the irrational fears of inflation in the midst of a global surfeit of productive […]

I am by training and background a professional economist. In 2005 I began writing a dissertation on the international monetary dimensions of the Great Depression. As recently as 2009 I was downplaying the notion that my studies had much to say about the current business cycle. Today, however, we are seeing a policy approach that is […]

more to come