Net zero has little to fear from populism
Philosophy Of Money by Eric Lonergan
by Eric Lonergan & Corinne Sawers
4M ago
The accidental wisdom of Mr Sunak How much does the transition to net zero have to fear from populism? In the UK, populist wannabe, Nigel Farage, has turned his sights on net zero, having recently dismissed Brexit as having ‘failed’. His recent rant against ‘meters’ would be humorous if it didn’t influence government policy. Prime Minister, Rushi Sunak promptly made an attempt to bid for the same ground. Unwittingly, Sunak parodies the populist approach to electoral manipulation espoused by Dominic Cummings during the Brexit referendum. In that instance, Cummings states that the strategy was t ..read more
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Reframing climate policy: a reply to Simon Wren-Lewis
Philosophy Of Money by Eric Lonergan
by Eric Lonergan & Corinne Sawers
1y ago
It is just over a year since we published Supercharge Me: Net Zero Faster, in the same week that Russia invaded the Ukraine. Six months later, the United States passed the Inflation Recovery Act. Both of these developments have profound relevance to climate policy – the main focus of our book. Before we turn to these consequences, a brief recap of the central thesis. A number of factors motivated us to write Supercharge Me. The underlying economics dominating climate policy – carbon taxation – is bad economics, even worse politics, and flies in the face of the evidence of almost every policy t ..read more
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Highs & lows of economics: Kilkenny, crypto, and inflation
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
1y ago
Economics keeps letting me down. The decade or so following the financial crisis spawned thousands of papers researching the financial system. I had a sinking feeling that none of it would help. Policy-making in economics, and economic research agendas, tend to follow the paradigm of PTSD sufferers. The trauma of the global financial crisis was itself protection. Researching manias, panics and crashes ex-post, was time-wasting. Manias such as crypto and NFTs (check out the digital tulip company) are harder to suppress. In contrast to banking crises, bubbles in lottery tickets have infinite dis ..read more
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Euro crisis II
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
1y ago
Euro crisis II has started. The good news is that we have been here before, so we have learnt some lessons, the bad news is the that the underlying challenge is far greater: Italy – the likely epicentre of this crisis – has a far higher debt to GDP ratio; and the Eurozone has an inflation problem. The latter is the crux of the matter. The first Euro crisis was of the ECB’s making because the threat of deflation was a clear and present danger in 2009 and 2010, and quantitative easing was not just the means to collapse spreads, it was a mandate requirement. It eventually took a sustained fall in ..read more
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EPIC debates
Philosophy Of Money by Eric Lonergan
by Eric Lonergan & Corinne Sawers
2y ago
EPIC debates: a reply to The Economist’s Free Exchange The Economist magazine this week devotes the Free Exchange column to a discussion of some of the ideas in Supercharge Me. There is little we disagree with in this typically well-informed take, but a number of areas of nuance and substance merit a reply.  One argument in Supercharge Me is that the economics of climate policy has been overly fixated on carbon pricing and taxes. We discussed this in more detail in our last post. To summarise, we think policy should be focused less on accurately pricing an externality, and more on al ..read more
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The wrong chapter of the textbook
Philosophy Of Money by Eric Lonergan
by Eric Lonergan & Corinne Sawers
2y ago
Climate policy: where economics went wrong Regular readers of this blog will be aware of a twelve month hiatus since I last posted anything. There is a good reason. Corinne Sawers, a sustainability expert, and I have co-authored Supercharge Me, a discussion on designing policies to collapse carbon emissions. The book is short, and should be readable in half a day. It should also be accessible to a very broad readership. This required some constraint on our nerdier tendencies. To make up for this, we will be posting a series of articles looking at many of the themes in more detail. Here is the ..read more
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Pandemania
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
3y ago
When will the GameStop? It is worth reflecting on the first crash on the New York Stock Exchange in 1901. On that occasion two magnates, James Hill and Edward Harriman, one supported by Standard Oil, the other by JP Morgan, were fighting for control of Northern Pacific Railroad company. In the process they inadvertently bankrupted the small investors who were short-selling.[1] Allegedly, Harriman accidentally cornered the market and the shares rose 600% in a day. ‘Retail’ investors, betting with leverage – in precisely the same way as they do today on apps and platforms – lost their shirts. Le ..read more
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QE is debt reduction
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
3y ago
QE is not a liability transformation – it is debt reduction The remuneration of bank reserves has been a source of significant analytical confusion among economists. This arcane technicality matters far more than it should [1]. The two most significant implications are: 1) public sector debt across the developed world is around 30% lower than typically estimated, and 2) central banks have limitless power to meet their inflation mandates, without veering into fiscal policy. As an aside, it also follows that the entire debate about central bank ‘equity’ is a distraction, and the widespread belie ..read more
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Marx has the last laugh?
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
3y ago
I cannot think of a better interlocutor than Chris Dilow. He raises another set of interesting questions in his reply to my reply. I’m in clear danger of completely forgetting our original divergence of thought, but that bothers me not at all. I have read a lot of Marx, and always want to read more. Marx is rightly regarded as the greatest social theorist. Marx was legendary synthesiser of thought. In this regard, Habermas – the greatest moral philosopher since Kant – is his true heir. Marx also created a framework of making sense of social change, organisation and power which is unrivalled in ..read more
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Angrynomics: a reply to Chris Dillow
Philosophy Of Money by Eric Lonergan
by Eric Lonergan
3y ago
Chris Dillow writes perhaps the most interesting economics blog I know. Its scope is considerable, and despite his declaration of bias – he self-identifies as a ‘marxist’ – he is typically empirical. His recent review of Angrynomics, a book I co-authored with Mark Blyth, raises a fundamental question which I have been reflecting on. It is encapsulated by the rhetorical question with which Chris ends his review: “What chance do we have of such reform, given that our existing institutions serve extractive capitalism so well by diverting anger away from its proper target?” Some context may help c ..read more
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