Showing posts with label David Andolfatto. Show all posts
Showing posts with label David Andolfatto. Show all posts

Sunday, April 28, 2019

Brian Romanchuk — Why Doesn't The Government Impose Taxes In Chickens?


Silly question? Brian is responding to someone who asserted that in effect government does. 

Actually, it used to be that government confiscated property to move it to government use, but that is no longer considered "proper," unless the police do it on other pretexts. In a monetary production economy, taxes are payable in "money," that is, the government's currency.

What David Andolfatto apparently means is that one's purchasing power declines as a result of taxation, which is true. But that is not all there is to it, as Brian points out. In addition, neoclassical assumptions come embedded in the assertion.

Physicist Richard Feynman famously pointed out that a major purpose of science is to keep us from fooling ourselves and we are the easiest one's to fool (because of cognitive-emotional bias). 

While David Andolfatto states the obvious at the household level with respect to barter, this is not actually what happens and that makes a big difference in the approach to economics.

Thomas Aquinas is famous for his paraphrasing of Aristotle in De ente and essentia, "A small mistake in the beginning becomes a big one by the end."

Framing counts. Get the framing wrong and miss the point.

Wednesday, August 1, 2018

Brian Romanchuk — Heterodox/Mainstream Views On Banking

David Andolfatto recently published "Reconciling Orthodox and Heterodox Views on Money and Banking," which discusses the theoretical split between recent mainstream thinking and heterodox views on banking. From my perspective, he is addressing heterodox critiques of mainstream thinking that I am not particularly interested in; in fact, based on his criteria, I would be closer to "mainstream" than "heterodox" -- as would possibly be Hyman Minsky. I would view the problem with mainstream modelling as resulting from a blind spot regarding the business sector. The fact that Andolfatto's proposed model used to structure the debate does not include a business sector might be used as evidence of my claim about that blind spot....
Bond Economics
Heterodox/Mainstream Views On Banking
Brian Romanchuk

Wednesday, October 5, 2016

Jason Smith — Keen, chaos, and equilibrium


Physicist Jason Smith critiques a debate among Steve Keen, Roger Farmer, Noah Smith, and David Andolfatto over Steve' recent Forbes post asserting that the economy is best modeled as a complex non-linear system instead of using the conventional linear stochastic models (DSGE) based on assuming general equilibrium.
Actually, as a physicist, I would say that even if the economy was a complex nonlinear chaotic system, linear stochastic models would still be its effective theory description. Regardless of what the quantum theory of gravity is, general relativity -- and even Newton's universal law of gravitation -- is still its long-distance effective theory.

Anyway, this prompted me to write something about Steve Keen's article in Forbes. Keen suffers from a problem that all public economists seem to suffer: asserting matters of opinion as matters of fact, and ongoing research programs as well-established frameworks. This will be made clear as we progress. Let's begin, shall we?
Information Transfer Economics
Keen, chaos, and equilibrium
Jason Smith

Tuesday, April 29, 2014

St. Lous Fed — Is Bitcoin a Good Money?

In the latest Dialogue with the Fed presentation, David Andolfatto asks: “Is bitcoin a ‘good money’?” According to Andolfatto, a good money should maintain stable purchasing power over short periods of time, with price-level stability depending both on money supply and money demand.

Advocates of bitcoin, he says, want a rigid supply—a supply that’s free of political manipulation. But, as Andolfatto points out, the cost of a rigid supply is an inability to respond to demand volatility. In the short run, money demand can fluctuate dramatically, which has happened with bitcoin. Andolfatto shows the short-run volatility of the purchasing power of bitcoin, as well as gold.

St. Lous Fed — On the Economy
Is Bitcoin a Good Money?
Video of David Andolfatto

 

Sunday, April 6, 2014

Rob Wile — St. Louis Fed Vice President: Bitcoin Could Be A Good Threat To A [sic] Central Banks

Last week, St. Louis Fed vice president and director of research David Andolfatto released a presentation on Bitcoin, becoming one of the most prominent central bank officials to study the cryptocurrency.
We caught up with Andolfatto to ask him about why he put this deck together, where he thinks Bitcoin is going, and whether he personally has anything invested in it....
Business Insider
St. Louis Fed Vice President: Bitcoin Could Be A Good Threat To A [sic] Central Banks
Rob Wile

 

Sunday, September 25, 2011

David Andolfatto — Commodity money is back


You may recall hearing that earlier this year, J.P. Morgan began to accept gold as collateral for some types of loans. The story can be found here. Here is an excerpt:

"Gold hasn't reinvented itself as a currency yet. But it is getting closer.

"J.P. Morgan Chase & Co. said it will allow clients to use the metal as collateral in some transactions. For example, a hedge fund wanting to borrow money for a short period can put up gold as collateral and use the borrowings to invest elsewhere, betting on making a better return. Typically, banks accept only Treasury bonds and stocks in such agreements.

"By making the announcement, J.P. Morgan is effectively saying gold is as rock solid an investment as triple-A rated Treasuries, adding to a movement that places gold at the top tier of asset classes. It also is trying to capitalize on all the gold now owned by hedge funds and private investors that is sitting idle in warehouses."
Read the rest at MacroMania, Commodity money: It's back! (and it sucks)

Why does commodity money suck? Well, what happens when commodities tank?

(h/t Rob Parenteau via Yves Smith)