The Blanchard Danger

by Roger Koppl Oliver Blanchard tells us “Where Danger Lurks”  in the macro-finance world. The big theme is nonlinearity, which is a profoundly conservative move: DSGE modeling is just fine and we don’t need to rethink it at all. We just need to add in some nonlinearities. Blanchard does not tell how to calibrate a … Continue reading The Blanchard Danger

Capitalism Loses Against Chimera

by Chidem Kurdas Gripes about capitalism go back 150 years and more. In the Communist Manifesto of 1848 Marx and Engels thundered that the specter of revolution haunted Europe, that the periodic reappearance of commercial crises “put on its trial, each time more threateningly, the existence of the entire bourgeois society.” They were not the first to … Continue reading Capitalism Loses Against Chimera

Radical Ignorance in the Financial Crisis

by Sandy Ikeda Jeffrey Friedman and Wladimir Kraus have a new book out, Engineering the Financial Crisis, (Univ. Penn Press) that grew out of research that first appeared in Critical Review back in 2009 on the "Causes of the Crisis."  Friedman’s lead article in that issue did an excellent job of providing a detailed but readable description … Continue reading Radical Ignorance in the Financial Crisis

Bleeding the Economy

by Roger Koppl At the Cobden Centre's website (and here), Steve Baker discusses recent Fed signals in the context of Big Players theory.  The more active the Fed (or other central bank), the greater the fraction of entrepreneurial attention devoted to Fed watching rather than productive activity.  As Baker says, “traders must pay attention to the … Continue reading Bleeding the Economy