(I wrote this post about two weeks ago, but then took a while getting the Substack actually launched. Going forward, hopefully the content will be more timely. All substack content is free; you can subscribe to the newsletter version here. Hopefully the content will be more timely in the future!) Sometimes I think being a normal economist must be like one of those classic office jobs. You drive to work, park in the garage, take the elevator up to your office. You take some papers from your inbox and put them in your outbox. There’s the research frontier; ok, we’ve advanced it a little bit ..read more

I barley keep up this blog any more; do I really need a new format for (not) writing online? The problem, from my point of view, is that, these days, the only way people see blogs (or most other things one writes) is via twitter. And relying on twitter does not, at this point, see like a great idea. I’m moderately hopeful that an email newsletter can offer an alternative way. In any case, my new substack is here. It’s pretty no-frills at the moment. I’ve pasted the first post below. For the moment I plan on cross-posting everything, but depending on how the substack goes I may revisit that. Wh ..read more

(I write a more-or-less monthly opinion piece for Barron’s. This is my contribution for March 2023; you can find the earlier ones here.) When interest rates go up, businesses spend less on new buildings and equipment. Right? That’s how it’s supposed to work, anyway. To be worth doing, after all, a project has to return more than the cost of financing it. Since capital expenditure is often funded with debt, the hurdle rate, or minimum return, for capital spending ought to go up and down with the interest rate. In textbook accounts of monetary policy, this is a critical step in turning ..read more

I have a new paper on how we conceptualize the supply side of the economy, coauthored with Arjun Jayadev. I presented a version of this at the Political Economy research Institute in December 2022. You can watch video of my presentation here — I come on, after some technical difficulties, around 47:00. (The other presentations from the conference are also very worth watching.) The paper will be published in the upcoming issue of the Review of Keynesian Economics. (The linked version is our draft; when the published version comes out I’ll post that.) Our fundamental argument is that w ..read more

(I write a monthly opinion piece for Barron’s. This is the most recent one; you can find earlier ones here.)  Has the inflationary fever broken at last? The headline Consumer Price Index, which was rising at a 17 percent annual rate last June, actually fell in December. Other measures show a similar, if less dramatic, slowing of price growth. But before we all start congratulating the Federal Reserve, we should think carefully about what else we’re signing up for. For Fed Chair Jerome Powell, it’s clear that slower price growth is not enough. Inflation may be coming down, but labor m ..read more

I’ve just been reading Keynes’ short sketches of Isaac Newton in Essays in Biography. (Is there any topic he wasn’t interesting on?) His thesis is that Newton was not so much the first modern scientist as “the last of the magicians” — “a magician who believed that by intense concentration of mind on traditional hermetics and revealed books he could discover the secrets of nature and the course of future events, just as by the pure play of mind on a few facts of observation he had unveiled the secrets of the heavens.” The two pieces are fascinating in their own right, but they also crystallized ..read more

There has been a lot of debate about whether the high inflation of 2021-2022 has been due mainly to supply or demand factors. Joe Stiglitz and Ira Regmi have a new paper from Roosevelt making the case for supply disruptions as the decisive factor. It’s the most thorough version of that case that I’ve seen, and I agree with almost all of it. I highly recommend reading it.  What I want to do in this post is something different. I want to clarify what it would mean, if inflation were in fact driven by demand. Because there are two quite distinct stories here that I think tend to get mixed up ..read more

On December 2-3, 2022, the Political Economy Research Institute at the University of Massachusetts-Amherst (where I did my economics PhD) will be hosting a conference on “Global Inflation Today: What Is To Be Done?”1 I will be speaking on “Rethinking Supply Constraints,” a new project I am working on with Arjun Jayadev. Our argument is that we should think of supply constraints as limits on the speed at which production can be reorganized and labor and other resources can be reallocated via markets, as opposed to limits on the level of production determined by “real” resources. The idea is tha ..read more

(I write a monthly opinion piece for Barron’s. This is my contribution for November 2022.) How much of our inflation problem is really a housing-cost problem? During the first half of 2021, vehicle prices accounted for almost the whole rise in inflation. For much of this year, it was mostly energy prices. But today, the prices of automobiles and other manufactured goods have stabilized, while energy prices are falling. It is rents that are rising rapidly. Over the past three months, housing costs accounted for a full two-thirds of the inflation in excess of the Federal Reserve’s 2% targe ..read more

(This review appeared in the Summer 2022 edition of Jacobin.) After the passage of Medicare and Medicaid, universal health insurance seemed to be on its way. In 1971, the New York Times observed that “Americans from all strata of society … are swinging over to the idea that good health care, like good education, ought to be a fundamental right of citizenship.” That same year, Ted Kennedy introduced a bill providing universal coverage with no payments at the point of service, on the grounds that “health care for all our people must now be recognized as a right.” The bill didn’t pass, but ..read more