Tag Archives: Macroeconomics

How The Economic Machine Works

I don’t agree with everything in this video by Ray Dalio, but it is an interesting perspective on the macroeconomy and how important credit is in an endowment economy.

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An Economical Business-Cycle Model

From Pascal Michaillat and Emmanuel Saez: We construct a microfounded, dynamic version of the IS-LM-Phillips curve model by adding two elements to the money-in-the-utility-function model of Sidrauski [1967]. First, real wealth enters the utility function. The resulting Euler equation describes consumption as … Continue reading

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Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Changes

From Christy Romer and David Romer: From the early 1950s to the early 1990s, increases in Social Security benefits in the United States varied widely in size and timing, and were generally not undertaken in response to short-run macroeconomic developments. … Continue reading

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Macroeconomic Implications of Agglomeration

From Morris Davis, Jonas Fisher, and Toni Whited: Cities exist because of the productivity gains that arise from clustering production and workers, a process called agglomeration. How important is agglomeration for aggregate growth? This paper constructs a dynamic stochastic general … Continue reading

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Are Markups Increasing?

Given the recent discussion about trends in corporate profits and market power [see a great FT article by Robin Harding, this op-ed from Paul Krugman, this post from Tyler Cowen, and these two posts of mine], I thought I’d share this figure from … Continue reading

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Austerity and the Greek Depression

The NY Times has a nice feature that compares the Greek economy from 2007-2012 to that of the US from 1929-1934. Besides the disturbing similarity, the most notable feature of this figure is how different the government spending response has been. … Continue reading

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Short-term Debt, the Supply of US Treasuries, and Financial Crises

Annette Vissing-Jorgensen and  Arvind Krishnamurthy have an interesting new paper that Annette presented at Berkeley yesterday. It’s a nice example of using a simple, tractable model to understand a very important issue – the demand for safe and liquid short-term … Continue reading

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