It is very hard to argue either that r* has risen or that r* does not matter for stabilization policy; François Chollet has an adult version of my baby-comprehension take on MAMLMs; very briefly...
Drezner: The China Shock was mainly about transportation and communications technology, not policy. The main contribution of policy was dollar overvaluation caused by fiscal deficits.
What is called "mezoeconomics" still sounds like microeconomics to me. I'd like to see a head-to-head use of "mezoeconomics" vs "microeconomics" to do policy analysis.
Let's hope "mezoeconomics" is not just how you wave your hands when microeconomics does not give you the result you want.
"Second… the high degree of uncertainty about r-star means that one should not overly rely on estimates of r-star in determining the appropriate setting of monetary policy at a given point in time…"
And since monetary policy is only made at one point in time per time. that means not to rely on r-star ever. :)
I'd guess that whatever variables go into estimating r-star _would_ be relevant in estimating discount rate for use in public investment decisions.
Drezner: The China Shock was mainly about transportation and communications technology, not policy. The main contribution of policy was dollar overvaluation caused by fiscal deficits.
https://thomaslhutcheson.substack.com/p/dollars-and-deficits
https://thomaslhutcheson.substack.com/p/policy-tariffs-and-trade-3-china
Central Country: My guess is that with today's regulatory framework the Eastern terminus of the Transcontinental Railroad would be Oakland.
I was just looking at the BART and see that it hardly goes south of SF at all! ???
What is called "mezoeconomics" still sounds like microeconomics to me. I'd like to see a head-to-head use of "mezoeconomics" vs "microeconomics" to do policy analysis.
Let's hope "mezoeconomics" is not just how you wave your hands when microeconomics does not give you the result you want.
"Second… the high degree of uncertainty about r-star means that one should not overly rely on estimates of r-star in determining the appropriate setting of monetary policy at a given point in time…"
And since monetary policy is only made at one point in time per time. that means not to rely on r-star ever. :)
I'd guess that whatever variables go into estimating r-star _would_ be relevant in estimating discount rate for use in public investment decisions.