tag:blogger.com,1999:blog-2546602206734889307.post8103485944572044845..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: New versus traditional Phillips curves and the Great RecessionMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2546602206734889307.post-68049701897365499452013-12-17T10:13:36.853+00:002013-12-17T10:13:36.853+00:00I am astonished that Philips curves, in whatever g...I am astonished that Philips curves, in whatever guise, still feature in discussions of economic behaviour. It seems to me that the theoretical underpinnings of Philips curves are deeply flawed. For example see the analysis that is presented on Page 6 of website www.economyuk.co.uk Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-43894582595695992842013-12-13T18:32:22.671+00:002013-12-13T18:32:22.671+00:00There are so many dogmatic believes here. For ins...There are so many dogmatic believes here. For instance, I am not sure why the discount term in the NKPC should be close to unity. How do you know the average John devalues tomorrow by only 5%? Why should you in the first place assume that we are all identical when you build your DSGE model? People are different in so many respects and admiring this thing would destroy the macroeconomics as we know it. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-44503364265547938842013-12-13T07:34:32.690+00:002013-12-13T07:34:32.690+00:00Nice post. I largely agree.
A rule of thumb I fin...Nice post. I largely agree.<br /><br />A rule of thumb I find useful:<br /><br />A PC based on forward looking expectations (for which RE may be a useful approximation) works better when there is a particular type of regime change. Not your typical NK regime change where a change in the Taylor rule would be a regime change. <br /><br /> Rather, a regime change such that at least one of the regimes involve a period of significant, widespread and shared socio-economic anxiety, which plays a role in coordinating the behaviour of the aggregate. <br /><br />So a forward looking expectations based PC is likely a better guide in the following scenarios:<br /><br />1. The start of a major depression, esp if preceded by the bursting of a bubble<br />2. The beginning or end of major wars<br />3. The end of a hyperinflation.Hermannoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-57471036688959519812013-12-12T22:52:04.146+00:002013-12-12T22:52:04.146+00:00Could the theory that rates are stuck at the ZLB b...Could the theory that rates are stuck at the ZLB be used to patch the New Keynesian model? I thought that was the purpose of the analysis around the ZLB.<br /><br />One concern I have is that we do not have a measure of the output gap. Is there a risk is that the output gap measure willl be revised to give the right inflation prediction?Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.com