Another look at the Koizumi boom

In my previous post, I reported on the remarkably different trajectories that consumption and investment have taken in Japan since the Asian financial crisis. Consumption has boomed at the expense of investment.Junichiro...

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Fortsatt dyr fotballopsjon

Førsteamanuensis Helge A.L Nordahl kommer med interessant kritikk av min kronikk om hvordan opsjonen som Vålerenga kjøpte på Herman Stengel kan verdsettes.   Nordahl skriver at sannsynligheten for at Stengel når høyeste verdi bare er 2,5 % i min modell. Sannsynligheter spiller imidlertid ingen...

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Beregn din egen Stengelopsjon!

Her er et regneark som gjør at du selv kan beregne verdien av en Stengel-opsjon med dine egne forutsetninger. Regnearket inneholder en makro som beregner binomisk opsjonsverdi, så du må tillate at makroer kjøres. Det kan bety at du først må lagre Excel-dokumentet lokalt før du åpner det.Jeg har lagt...

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Dyr fotballopsjon

Asker og Bærum tingrett frikjente i forrige uke de fire tiltalte i Gunnarsson-saken. Dommen baserer seg at fire millioner var en grei pris for en opsjon på Hermann Stengel. To hundre tusen er mer realistisk.Saken gjaldt...

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What's up with Japan? (G, evidently)

There is a very interesting monetary policy experiment happening in Japan these days. The outcome of the project will surely be discussed in future macro textbooks. While we are waiting for events to play out, I thought...

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Confessions of a rehypothecating fractional reserve banker

I've been trying to wrap my mind around the new 4-letter-word in finance: rehypothecation. I found out that it seems to be related to an old 4-letter-word: fractional reserve banking. I want to argue that these phrases do...

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Like a Good Neighbor: Evan Koenig on NGDP targeting

Bill Woolsey points me to a nice paper by Evan Koenig that provides a theoretical foundation for NGDP targeting: Like a Good Neighbor.I like this paper a lot. Koenig is a lucid writer. The theory is sound and easy to...

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NGDP targeting and the Taylor Rule

Chris Waller pointed out to me this morning that the NGDP target is formally equivalent to a special case of the Taylor rule. (Maybe this is generally known? I don't know.)The argument goes as follows. Let R denote the nominal interest rate. Then the NGDP target proposes a monetary policy rule...

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The magic fairy NGDP wand

It's been a good day of blogging. And it seems like the day has not ended yet. Scott Sumner posts his most recent reply to me here: Second Reply to Andolfatto. Alright, time to take a step back and put things in some perspective. What exactly is my beef with NGDP targeting anyway? The somewhat surprising...

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A reply to Sumner

I figured that my previous post might stimulate an interesting debate on the relative merits of NGDP targeting. So far, I've only heard from Scott Sumner (see here). Scott thinks I'm wrong for many reasons. He lists 4, which...

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U.S. price-level dynamics

Since some measure of "price-level stability" constitutes one half of the Fed's dual mandate, I thought it might be of some interest to document the behavior of various measures of the price-level and its components in the...

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