In a new working paper, David Austin argues that for a variety of reasons, private agents do not optimize with respect to energy efficiency measures. From Addressing Market Barriers to Energy Efficiency in Buildings:
Geopolitical unrest and key oil producers
Some people observed 9/11 by lighting candles, others by killing more Americans.
China’s Trade Surplus
The August numbers are in. From MarketWatch:
China posted a wider-than-expected trade surplus in August as imports unexpectedly contracted from the year-ago period, suggesting anemic domestic demand, according to data released Monday.
Influencing the internets
It seems UFollow’s algorithms decided I’m among the 100 most influential columnists and bloggers. Other econbloggers on their list included Paul Krugman, Felix Salmon, Ezra Klein, Yves Smith, and Bill McBride.
Woodford and QE3
Columbia University Professor Michael Woodford’s paper at the Fed’s Jackson Hole conference last week made the case that more large-scale asset purchases by the Fed would by themselves do nothing, and suggested that instead what really matters is the Fed’s communication of its future intentions. There’s a fair bit in Woodford’s analysis that I agree with. But unlike Woodford, I think that asset purchases can be an important part of what the Fed could do in the here and now. Here I explain why.
The August Employment Report
Policy action is needed, with all deliberate speed.
Representative Ryan on Conditional Macroeconomic Prediction
The gold standard and economic growth
Tyler Cowen acknowledges that the gold standard as implemented in 1929-1932 was a disaster, and that a gold standard would also work very poorly in the presence of the big changes in the real value of gold over the last decade. But in the interests of promoting a balanced discussion, he asks:
Dare anyone critical of the gold standard bring themselves to utter these (roughly true) words?: “For the Western world, the gold standard era, defined say as 1815-1913, was arguably the greatest period of human advance ever, at least in matters of economics, culture, and technology.”
Here are my thoughts on Tyler’s question.
Are You Better Off Than You Were at the End of the Bush Administration? A Data-Based Assessment
I’ve heard a lot about the “four years ago” comparison. Four years ago, we were on the cusp of Don Luskin’s famous prediction (“… we’re on the brink not of recession, but of accelerating prosperity.”), and Phill Gramm had two months earlier decried the ongoing “mental recession”. [0] It seems to me the more appropriate marker is the last election, in 2008Q4. We can then assess what the data tells us about 2012Q2 vis a vis 2008Q4.
Return to the gold standard
Several sources reported that the 2012 Republican Platform would call for a commission to explore the possibility of the U.S. returning to a gold standard. However, the final document makes no mention of gold, and instead seems to have settled on a proposal that is unlikely to do any harm:
President Reagan, shortly after his inauguration,
established a commission to consider the feasibility
of a metallic basis for U.S. currency. The
commission advised against such a move. Now, three
decades later, as we face the task of cleaning up the
wreckage of the current Administration’s policies, we
propose a similar commission to investigate possible
ways to set a fixed value for the dollar.
I thought it would be worthwhile to review some of the reasons why we should be thankful that saner heads seem to have prevailed.