Limited vision of text-continuation GPT models; crypto in decay; Réne Walter: On Stochastic Libraries; Samantha Hancox-Li: The Illiberal’s Dilemma; John Gruber: If You Come at the King; Ron Amadeo...
"8. Harold James: Says More: " The 1840s were terrible in so many ways. Bad harvests. Hungry Forties. Going by median/mean stature at adulthood, some of the shorter cohorts -- if not the shortest -- of the 19the century were born and raised in the 1830s, 1840s and 1850s. The kids were not alright. Oliver Twists were real (including what's in the book). This probably had long-reaching repercussions.
Janet Yellen via FT "“Economics are not a zero-sum game,” she said…"
I hope at least US politicians are listening.
Harold James: In a more sensible world we would be getting more theory driven data analysis from political scientists, psychologists, sociologists, anthropologists but in the meantime, economists will have to continue the Imperial Project. :)
Hancox Li: Nicely said, but it leaves out the hard part: the appeal of illiberalism within Liberal Democracies. Is Liberalism but the dying embers of the fire of Faith?
This is probably too late to be of interest, but more interesting to me is the bit before the quote: "The Treasury secretary underlined that the US was not trying to undermine China’s competitiveness, nor to constrain its development". If only because it is quite plainly not true.
Some of what the US had chosen to do could be interpreted this way, but the decision to prohibit China from accessing certain technology - and to pressure allies to do the same - is quite plainly an attempt to "constrain [China's] development."
More importantly, the written text of Yellen's remarks gives the game away. The claim may be that "these national security actions are not designed for us to gain a competitive economic advantage, or stifle China’s economic and technological modernization", but that these actions are plainly decisions based on "security".
But Yellen also said: "All this to say: China’s economic growth need not be incompatible with U.S. economic leadership." Which is to say: yes, we will allow economic growth for China - but only insofar as it does not challenge the dominance of the US, which means that China's development must be constrained where it can challenge the "economic leadership" of the US.
This can be sliced in different ways. I think the right way to think about it is that almost all of the ways China could develop would be beneficial the US, but a few are not, and we should try to encourage the first and discourage the second. And although it may not make much difference it's important for the US to both proclaim and do the first.
But even more important is for the US to adopt policies that would be good for the US and China: more immigration of skilled workers, lower deficits, fewer restriction on international trade and investment, land use, safety and environmental regulation guided by cost-benefit analysis, taxation of net emissions of CO2, for a start.
That may be "the right way to think about it", but that is not the way that the US is acting. Pressuring other states to ensure that China cannot access technology, as the US has done, is attempting to limit China's economic growth.
Again: the remarks give the game away: the policy of the US is that China can develop - so long as this does not challenge the "leadership" of the US. The corollary is that the US will attempt to block anything that does challenge that leadership.
There IS no overwhelming case for Central Bank Digital Currencies, but if there were, it would not be an enhanced ability to provide monetary stimulus. Buiter’s premise for this need is faulty. While it is indeed likely that there will be periods in the future when central banks will again need to take active measures to keep inflation up to target, they will not "return" to being limited in their ability by the “zero lower bound.”
-a) The Fed, at least, never reached zero for its FF rate and by paying interest on reserves _prevented_ short term rates from falling to zero.
-b) The Fed had a perfectly good instrument of keeping inflation up to target –- Quantitative Easing, the purchase of long-term liabilities of the government and quasi-government bodies -- which it simply failed to use vigorously enough in a context of making clear that it would "do what it takes" not to undershoot its target.
This is not to say that central banks could not use additional instruments. It would be useful for the US Treasury to issue a series of “Trillionths,” a liability of different tenors whose future value depends on the GDP at the future time. Even if the Fed did not use intervention in this market as a policy instrument, (Scott Sumner argues that it would be appropriate use such intervention to stabilize GDP growth as a policy _ target_) the relationship of the price of the Trillionth vis a vis a debt instrument of the same tenor would provide information on market sentiment about real growth prospects, surely of use to the Fed and everyone else.
The Treasury should also issue additional Treasury Inflation Protected Securities (TIPS), currently available only in 5- and 10-year tenors, at intermediate tenors. Presently, comparison of TIPS with its corresponding non-protected counterpart shows market expectations of inflation over the 5- or 10-year period. Intermediate tenors would show expectations over shorter periods of time, which ought to be of more utility to the Fed for achieving its inflation target.
"8. Harold James: Says More: " The 1840s were terrible in so many ways. Bad harvests. Hungry Forties. Going by median/mean stature at adulthood, some of the shorter cohorts -- if not the shortest -- of the 19the century were born and raised in the 1830s, 1840s and 1850s. The kids were not alright. Oliver Twists were real (including what's in the book). This probably had long-reaching repercussions.
Janet Yellen via FT "“Economics are not a zero-sum game,” she said…"
I hope at least US politicians are listening.
Harold James: In a more sensible world we would be getting more theory driven data analysis from political scientists, psychologists, sociologists, anthropologists but in the meantime, economists will have to continue the Imperial Project. :)
Hancox Li: Nicely said, but it leaves out the hard part: the appeal of illiberalism within Liberal Democracies. Is Liberalism but the dying embers of the fire of Faith?
This is probably too late to be of interest, but more interesting to me is the bit before the quote: "The Treasury secretary underlined that the US was not trying to undermine China’s competitiveness, nor to constrain its development". If only because it is quite plainly not true.
Some of what the US had chosen to do could be interpreted this way, but the decision to prohibit China from accessing certain technology - and to pressure allies to do the same - is quite plainly an attempt to "constrain [China's] development."
More importantly, the written text of Yellen's remarks gives the game away. The claim may be that "these national security actions are not designed for us to gain a competitive economic advantage, or stifle China’s economic and technological modernization", but that these actions are plainly decisions based on "security".
But Yellen also said: "All this to say: China’s economic growth need not be incompatible with U.S. economic leadership." Which is to say: yes, we will allow economic growth for China - but only insofar as it does not challenge the dominance of the US, which means that China's development must be constrained where it can challenge the "economic leadership" of the US.
This can be sliced in different ways. I think the right way to think about it is that almost all of the ways China could develop would be beneficial the US, but a few are not, and we should try to encourage the first and discourage the second. And although it may not make much difference it's important for the US to both proclaim and do the first.
But even more important is for the US to adopt policies that would be good for the US and China: more immigration of skilled workers, lower deficits, fewer restriction on international trade and investment, land use, safety and environmental regulation guided by cost-benefit analysis, taxation of net emissions of CO2, for a start.
That may be "the right way to think about it", but that is not the way that the US is acting. Pressuring other states to ensure that China cannot access technology, as the US has done, is attempting to limit China's economic growth.
Again: the remarks give the game away: the policy of the US is that China can develop - so long as this does not challenge the "leadership" of the US. The corollary is that the US will attempt to block anything that does challenge that leadership.
I did not say that the US was doing it right, but that there is a way to "do it right" or less wrong.
Buiter:
Free of charge, my post on Radical Centrist:
Trillionths, "Yes;" CBDC, "No"
There IS no overwhelming case for Central Bank Digital Currencies, but if there were, it would not be an enhanced ability to provide monetary stimulus. Buiter’s premise for this need is faulty. While it is indeed likely that there will be periods in the future when central banks will again need to take active measures to keep inflation up to target, they will not "return" to being limited in their ability by the “zero lower bound.”
-a) The Fed, at least, never reached zero for its FF rate and by paying interest on reserves _prevented_ short term rates from falling to zero.
-b) The Fed had a perfectly good instrument of keeping inflation up to target –- Quantitative Easing, the purchase of long-term liabilities of the government and quasi-government bodies -- which it simply failed to use vigorously enough in a context of making clear that it would "do what it takes" not to undershoot its target.
This is not to say that central banks could not use additional instruments. It would be useful for the US Treasury to issue a series of “Trillionths,” a liability of different tenors whose future value depends on the GDP at the future time. Even if the Fed did not use intervention in this market as a policy instrument, (Scott Sumner argues that it would be appropriate use such intervention to stabilize GDP growth as a policy _ target_) the relationship of the price of the Trillionth vis a vis a debt instrument of the same tenor would provide information on market sentiment about real growth prospects, surely of use to the Fed and everyone else.
The Treasury should also issue additional Treasury Inflation Protected Securities (TIPS), currently available only in 5- and 10-year tenors, at intermediate tenors. Presently, comparison of TIPS with its corresponding non-protected counterpart shows market expectations of inflation over the 5- or 10-year period. Intermediate tenors would show expectations over shorter periods of time, which ought to be of more utility to the Fed for achieving its inflation target.