No one really seems to know what a “Keynesian” is these days. It’s one of these terms that now means “socialist”, “big government” or “proponent of fiscal policy”. Of course, it doesn’t actually mean any of those things. Keynes wasn’t a socialist. He didn’t like big government. And he liked Monetary Policy as much as… Read More
Problems in the banking sector played a seriously damaging role in the Great Recession. In fact, they continue to. This column argues that macroeconomic models were unable to explain the interaction between banks and the macro economy. The problem lies with thinking that banks create loans out of existing resources. Instead, they create new money in the form of loans. Macroeconomists need to reflect this in their models.
This morning the Wall Street Journal ran a story which showed that 2013 was the first year in decades that there was a net outflow from 401(k) plans. The immediate reaction by many was that this is just the start of a mass exodus from the markets by retiring baby boomers, which could have huge implications on the markets in the coming years as we patiently wait for Millennials to pick up the slack with their savings in the 2020s.
It’s graduation season and that means that lots of young people around the country are getting job advice. And these armies of young people will inevitably hear a refrain that has become all too constant in recent years: “do something you love”. But you know what – this advice is total BS. And it is… Read More
One of the points I tried to stress in my book was that each economic cycle is its own unique environment. I find it very helpful to think of the financial system as a constantly evolving system. Although the past can serve as general guide, it will never serve as a perfect guide. And that’s… Read More