Why do I feel bad for the Spaniards, but not the Greeks?

[KrazyHorse]

BTW, successful loosenings of monetary policy should increase the yield curve across the board when short-term rates are pinned at zero.

Ignore interest rates. Interest rates suck as any kind of indicator.

[Zoetstofzoetje]

there´s this academic journal called the ¨post-autistic economics review¨.

the name would suggest some economists might be mistaking models and maths for exactly mirroring reality, rather than attempting to understand it, and/or influencing it.

[KrazyHorse]

Also, BTW, I continue to fail to understand the traditional IR mechanism in the face of rational expectations. There is no particular reason the IS curve should slope downwards with an effective CB

[KrazyHorse]

there´s this academic journal called the ¨post-autistic economics review¨.

the name would suggest some economists might be mistaking models and maths for exactly mirroring reality, rather than attempting to understand it, and/or influencing it.

What are the chances that somebody who doesn't have the first clue about econ, finance or math has something useful to contribute to this discussion? My model says 0.

[giblets]

Also, BTW, I continue to fail to understand the traditional IR mechanism in the face of rational expectations. There is no particular reason the IS curve should slope downwards with an effective CB

Huh? So an expansionary monetary policy is supposed to lead to higher interest rates?

[KrazyHorse]

Also, BTW, I continue to fail to understand the traditional IR mechanism in the face of rational expectations. There is no particular reason the IS curve should slope downwards with an effective CB

Also, Nick Rowe channels my frustration with the classical IS-LM model (much more eloquently and in depth!) that I expressed to Jag in person last month:

http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/08/is-this-a-liquidity-trap.html

[Kuciwalker]

Also, BTW, I continue to fail to understand the traditional IR mechanism in the face of rational expectations. There is no particular reason the IS curve should slope downwards with an effective CB

I always thought it should be a vaguely paraboloid shape...

[KrazyHorse]

Huh? So an expansionary monetary policy is supposed to lead to higher interest rates?

Yes, of course; a more expansionary monetary policy should increase real growth expectations and increase inflation expectations. Which of these two leads to a lower interest rate at the long end again?

[Zoetstofzoetje]

What are the chances that somebody who doesn't have the first clue about econ, finance or math has something useful to contribute to this discussion? My model says 0.

i would never claim to know anything about math. i´m happy to hear that you love models though. i love them too. in mini-skirts.

btw, are you ill? you haven´t called me an idiot for some time now. i´m beginning to miss it. hugs and kisses

[KrazyHorse]

I always thought it should be a vaguely paraboloid shape...

I think it should be thrown in the garbage as one of the most destructive things ever invented...

[giblets]

Yes, of course; a more expansionary monetary policy should increase real growth expectations and increase inflation expectations. Which of these two leads to a lower interest rate at the long end again?

So in the traditional IS-LM model, if there's an expansionary monetary policy, rational expectations causes the IS curve to shift to the right as well?

[Zoetstofzoetje]

anyways, KH´s model raving reminds me of this seminar i attended, where all the bigshot economist professors were faffing about with the ECB lot.

an hour of modelling and statistics later, the conclusion was that they, as governing body, could not have seen the economic crisis coming - none of the indicators that they were monitoring in their models went off. so they were not responsible.

isn´t it beautiful? i saved it on my livescribe. listen to it every now and then to have a good laugh.

[KrazyHorse]

So in the traditional IS-LM model, if there's an expansionary monetary policy, rational expectations causes the IS curve to shift to the right as well?

I don't understand the traditional IS model. It seems to me as though the slope of the IS curve is arbitrary (depending on circumstances). I particularly don't understand the classical IR mechanism's explanation for why the IS curve slopes downward. I wish somebody could explain it to me in a way which doesn't blatantly contradict ratex and an inflation targeting cb, and which doesn't require more than a page of math.

I'm serious about this. Nobody has yet managed to do so, despite my most sincere attempts to understand this.

[KrazyHorse]

anyways, KH´s model raving reminds me of this seminar i attended, where all the bigshot economist professors were faffing about with the ECB lot.

an hour of modelling and statistics later, the conclusion was that they, as governing body, could not have seen the economic crisis coming - none of the indicators that they were monitoring in their models went off. so they were not responsible.

isn´t it beautiful? i saved it on my livescribe. listen to it every now and then to have a good laugh.

You're an idiot. Recessions are only foreseeable when there's a malfunctioning central bank, you nincompoop.

Also, I doubt every element of your story.

[Zoetstofzoetje]

MUCH BETTER!! xx