The Liquidity Trap In the IS/MY Model (“Sitges Equation”)

by Dirk Ehnts, Econoblog101 I have recently built a small model which builds on the “Sitges” balance of payments identity. “Sitges” – originally a little town close to Barcelona – helps me to remember that the change in debt of the private sector (private sector savings – investments) plus that of the public sector (taxes …

Understanding Causation: Debt and Growth

Debt-to-GDP Ratios and Growth: Country Heterogeneity and Reverse Causation, the Case of Japan (Ultra Wonky) by Matthew Berg and Brian Hartley, New Economic Perspectives Originally posted at New Economic Perspectives, 29 April 2013 Summary We find that the correlation between government debt-to-GDP ratios and future growth in Reinhart and Rogoff’s (2010a and and 2010b) dataset …

Judgments of Paris, Princeton, and Lenox, Part 2

Written by Elliott Morss, Morss Global Finance Introduction It was striking in 1976 when Californian wines “sort of” beat French wines in Paris tastings. That tasting was memorialized in George Taber’s great book Judgment of Paris. I say “sort of” because Orley Ashenfelter and Richard E. Quandt obtained the results from the Paris tasting and …

Mental Illness and Homelessness

by Mieke Dale-Harris, Institute for Advanced Studies Last week “Giving to beggars is bad and exploitative labor is good” was posted. This article cited people’s rationalizations for not giving to beggars. Two of the major public perceptions of beggars that the author received were that the adults were on the streets by their own fault …

U.S. Drug Policies: Lessons from Prohibition

by Elliott Morss, Morss Global Finance Introduction Consider first that a drug is “a chemical substance that affects the processes of the mind or body”. That means nicotine, cocaine, opium, alcohol, heroin, amphetamines and food (yes – food) are drugs. And as I have written, all of them are dangerous. One would hope that US …