Ricardo Reis @R2Rsquared Twitter profile

Last Seen Profiles

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@gonukito

Ricardo Reis

@R2Rsquared

2 years

This is going straight into the notes of my principles of economics class this Fall.

Hannibal Lecter

@Doc_Hannibal

2 years

Y así es como funciona el libre mercado.

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Ricardo Reis

@R2Rsquared

3 years

** MMT is the new supply-side economics Forty years ago, some economists started from an uncontroversial (but important) result: a lower tax rate raises the tax base, so revenues won't fall as much. But then they ran with it, predicting tax rate cuts could raise revenues. 1/13

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Ricardo Reis

@R2Rsquared

4 years

* A take on the economics of the virus * [1/12] The first-order effect is a drastic fall in labor (L) for one quarter (hopefully no more). GDP doesn’t fall from trees, less L means less Y. Inevitably. Only a small fraction of labor at work can be substituted by labor from home.

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Ricardo Reis

@R2Rsquared

4 years

*** Monetizing the debt When a country faces a large sudden expense with strains on economy and financial sector, the government massively borrows. Debt markets can't absorb new debt, so the central bank steps in. Is debt being monetized and will inflation soon follow? [1/12]

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Ricardo Reis

@R2Rsquared

2 years

*** For Europe, more is at stake today One week of economic sanctions is not enough to assess their full impact. But it has been enough time to see they are not enough to stop the war. The next step is clear: European countries should stop buying Russian oil and gas on Monday🧵

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Ricardo Reis

@R2Rsquared

2 years

*** The original sin of QE (and QT) QE policies, adopted by the most central banks in the last 15 years, suffered from a sin at birth. This came back to bite this Thursday in the UK. Confusingly, there are three distinct policies that go under the name of QE. 🧵 [1/15]

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Ricardo Reis

@R2Rsquared

3 years

** The “macro” view on 2021 inflation Since March 21, I've given many public lectures on inflation. All of them included the slide below (most recently at the Jahnsson prize lecture) Tldr: every macro theory of inflation correctly predicted the high inflation that we have seen🧵

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Ricardo Reis

@R2Rsquared

2 years

** The burst of high inflation in 2021-22: How and Why? I just released a paper based on several talks I’ve given over many months (starting with Markus Academy @markuseconomist and ending with @BIS_org ) on why monetary policy did not stop inflation rising in 2021-22 🧵

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Ricardo Reis

@R2Rsquared

3 years

Demasiado tempo a ver a equipa italiana no #EURO2020 e agora também falo a esbracejar...

Embaixador da Noção

@EmbaixadorN

3 years

🇵🇹 3 razões para a estagnação: -impostos excessivos -má alocação de capital -empresas zombie Fantástica entrevista a @R2Rsquared , um colosso do nosso país.

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Ricardo Reis

@R2Rsquared

2 years

** Blaming the ECB for an Italian debt crisis? As the ECB (finally!) raised rates to curb inflation it announced a new bond-buying program. If that fails and an Italian debt crisis follows, is the ECB to blame? Some rough back-of-the-envelope numbers on 🇮🇹 debt fundamentals… 🧵

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Ricardo Reis

@R2Rsquared

11 months

My new book is out for sale! With @MarkusEconomist , 10 self-contained chapters, each introducing a macro-finance concept, and applying it to two historical crises.

Princeton University Press @princetonupress.bsky.s

@PrincetonUPress

11 months

Explore the complexities of economic crises with A Crash Course on Crises, a groundbreaking book by @MarkusEconomist & @R2Rsquared . With cutting-edge research & case studies, it takes readers toward understanding economic instability. Out now! #EconTwitter

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Ricardo Reis

@R2Rsquared

1 year

*** Inflation and wages A long time ago, Jordi Gali, Mark Gertler and Argia Sbordone noted: with sticky prices, inflation is expected to accelerate when marginal costs are temporarily low. Intuitively, costs will rise back, and as they do, firms will raise prices. 🧵1/12

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Ricardo Reis

@R2Rsquared

4 years

**** An ABC recovery People discussing whether it is going to be a V, U, L, ... recession. I say neither. Sticking to the alphabet, it will be an ABC recovery. De-trended (and smoothed) GDP will take the shape in this picture:

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Ricardo Reis

@R2Rsquared

3 years

I learned from political scientists that the far left and the far right are closer to each other than to the centre, united by a disregard for moderation. In economic policy, so are left-wing MMT and right-wing old supply-side econ. United by a disregard for fiscal prudence 12/13

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Ricardo Reis

@R2Rsquared

9 months

* Why raising interest rates lowers inflation, and usually (but may not) raises unemployment 🧵 When the CB raises nominal interest rates, agents want to save more in nominal vehicles as opposed to real ones. The relative value of nominal vs real must rise. Inflation must fall.

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Ricardo Reis

@R2Rsquared

2 years

It has been difficult to explain a key difference: -- wage increases driven by expectations of future inflation may cause future inflation; -- wage increases in response to past inflation, tight labor markets, or more worker bargaining power do not, per se, cause inflation.

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Ricardo Reis

@R2Rsquared

2 years

This picture is going straight to my intermediate macro notes.

Matías Nougués

@EliHeckscher

2 years

@IvanWerning Esta foto es genial

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Ricardo Reis

@R2Rsquared

2 years

After ten minutes failing to choose the wittiest comment to make on this news, I’ll just post it and look forward to reading the comments from my Twitter readers.

ECB Staff Union Demands More Pay to Guard Against Inflation

As the European Central Bank waits for the spike in euro-area inflation to moderate, its staff is proving less patient.

www.bloomberg.com

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Ricardo Reis

@R2Rsquared

4 years

Fiscal or monetary stimuli at t do not change the resource constraint when there is a binding L constraint. Focus policy right now on responding to the health emergency, funding health care, producing ventilators. Not on the stock market or the macroeconomy. [2/12]

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Ricardo Reis

@R2Rsquared

2 years

"Germany's decision to stop buying oil and gas from Russia may be the fastest way to end this war." says @sguriev

Sergei Guriev

@sguriev

2 years

This is why Germany's decision to stop buying oil and gas from Russia may be the fastest way to end this war. 5/5

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Ricardo Reis

@R2Rsquared

3 years

Today, supply side economics is respectable, because it is no longer used in its extreme (wrong) 1980s form. Maybe the same will happen with MMT. Hopefully under a more accurate name. (I've used new fiscal activism and new-style central banking but they never caught on.) 13/13

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Ricardo Reis

@R2Rsquared

2 years

RIP Ed Prescott. one of the architects of modern macroeconomics.

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Ricardo Reis

@R2Rsquared

4 years

The prestige of the Nobel prize ultimately depends on how its recipients are perceived by the community of scholars. So, it's a duty to add my 2c: this year's Econ Nobel was incredibly well awarded, and I can think of no one who clearly deserves it more than Milgrom and Wilson.

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Ricardo Reis

@R2Rsquared

4 years

** What are central bank swap lines and how do they work? Back in 2017, Saleem Bahaj and I researched the Fed's swap lines. There was little economic theory or evidence on this great recession policy (not much more today). Given their new prominence, here is an explainer [1/10]

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Ricardo Reis

@R2Rsquared

1 year

** What does SVB's failure imply for the Fed hiking cycle? Bank failures and bailout of large depositors has important implications for financial regulation, moral hazard, and general fairness. Good discussions here and in media. What about for inflation and monetary policy? 🧵

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Ricardo Reis

@R2Rsquared

3 years

For most surveys of expected inflation, is the median a good statistical forecaster of future inflation? Usually not. But does this mean that expected inflation does not matter to understand inflation? Absolutely not. Forecasting is not the same as understanding, or mattering.

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Ricardo Reis

@R2Rsquared

4 years

** Package of fiscal policies for the quarantine times Follows my earlier thread emphasizing the impact of #covid19 crisis on the productive capacity of the economy. Focusing policy on making the loss of potential output smaller and more transitory. [1/16]

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Ricardo Reis

@R2Rsquared

4 years

A football coach clearly expressing what should be the role of experts and the non-role of celebrities.

Pep Molero Gascón

@molerogascon

4 years

Jürgen Klopp sobre el coronavirus: “No entiendo ni me gusta que simplemente por el hecho de ser famoso mi opinión sea relevante sobre un tema del cual no soy experto ni tengo conocimiento. Yo soy un simple tipo que lleva una gorra de béisbol y va mal afeitado”. #CHELIV #FACup

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Ricardo Reis

@R2Rsquared

4 years

Economics is the study of the economy, not the study of economists. It is troubling that the first newspaper article I see after the main economics conference is not economics reporting, but rather reporting on economists. I hope we can fix this quickly

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Ricardo Reis

@R2Rsquared

4 years

"I didn't publish because I don't have money"

Brian J. Phillips - also on Bsky

@brian_jphillips

4 years

You may have heard of recent Econ Nobel recipients Milgrom and Wilson, but did you know about Wilson’s 🇲🇽 student Armando Ortega Reichert? His dissertation was influential, but never published, because he “didn’t have money.” Via @kaniskadam , who called him!

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Ricardo Reis

@R2Rsquared

2 years

Two years ago, governments ordered us to lockdown at home. It was worth it, to fight the virus, and to defend public health. To fight the virus of totalitarianism and defend freedom it is worth it to lock-down *all* Russian exports to global markets. More is at stake today

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Ricardo Reis

@R2Rsquared

3 years

RIP Robert Mundell. While we were colleagues at @columbia_econ for 8 years, I think I only spoke to him once (he spent his time in China and Italy). The article below by @BrianDomitrovic gives a short hagiography of his achievements. (h/t @MerliAless )

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Ricardo Reis

@R2Rsquared

1 year

Never underestimate how bad ideas from the US remerge in a worse form in LatAm. Scary scenes from Brazil 🇧🇷, hoping it all calms down.

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Ricardo Reis

@R2Rsquared

4 years

Finally, a crucial word of humility. It is a new shock, it is a *big* crisis, it is affecting the whole world. Policymakers would do well to try many things, from many different perspectives. This is just one of them, to complement others. [12/12]

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Ricardo Reis

@R2Rsquared

3 years

Start from the classical model in micro 101, the foundation of modern econ. A fundamental result (going back centuries) is that inflation is indeterminate. That means that if people expect inflation of 100%, inflation will be (close to) 100%. Why?

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Ricardo Reis

@R2Rsquared

9 months

*** Continuation of an academic debate I agree with @ojblanchard1 that price-level determination is at the core of monetary policy and short-run macro. Especially because it is fundamentally different from price-theory classical micro where the price level is indeterminate. 🧵

Olivier Blanchard

@ojblanchard1

9 months

1. Triggered by the exchange with @R2Rsquared @AngelUbide , @Guido_Lorenzoni and others: The discussion was at the core of macro. The nature of the determinants of the price level is THE fundamental issue in thinking about short run fluctuations, not a marginal or esoteric issue.

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Ricardo Reis

@R2Rsquared

3 years

MMT's extreme predictions have been repeatedly proven wrong by theory and data (just read some Latin American history). But they have popular hero figures (Kelton, Mosler) and an eager political audience in the left that will use any argument for raising public spending. 10/13

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Ricardo Reis

@R2Rsquared

2 years

That Switzerland is twice richer than Portugal, when so many of its residents are Portuguese, is the main reason why I struggle to accept culture-based theories of economic development #BayesPriors #ResearchBiases #unscientific

alexandre afonso

@alexandreafonso

2 years

Top 3 of most common surnames in Switzerland: German-speaking CH: Müller, Meier & Schmid French-speaking CH: da Silva, Ferreira, Pereira (followed by dos Santos and Rodrigues)

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Ricardo Reis

@R2Rsquared

4 years

In terms of economic mechanisms and theories: think neoclassical rather than Keynesian. More about intertemporal subsitution, less about aggregate demand or inflation. More about real economy, less about finance. Very different from Great Depression and Great Recession. [11/12]

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Ricardo Reis

@R2Rsquared

2 years

... John Moore, Nobu Kiyotaki, Jean-Charles Rochet, Mark Gertler, Raghuram Rajan, Gary Gorton first come to my mind, but there are many others. Bernanke, Diamond, and Dybvig are carrying the banner for a remarkable group of scholars. Science is a team sport.

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Ricardo Reis

@R2Rsquared

2 years

** Inflation: some optimism from expectations data The data from surveys of inflation expectations in the second half of 2022 will be very informative to distinguish three theories. They have important implications fo what inflation *will be*. 🧵

Ricardo Reis

@R2Rsquared

2 years

** The burst of high inflation in 2021-22: How and Why? I just released a paper based on several talks I’ve given over many months (starting with Markus Academy @markuseconomist and ending with @BIS_org ) on why monetary policy did not stop inflation rising in 2021-22 🧵

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Ricardo Reis

@R2Rsquared

3 years

I’ve just been catching up with Jackson Hole’s symposium. It had some great papers. But, of course, the attention went to Jay Powell’s speech. Most people liked it. But, reading it today, the speech has made me nervous about US inflation. Here is why. 🧵

Powell performs virtual balancing act at Jackson Hole

Fed chair avoids market tantrums while taking a step to withdrawing monetary stimulus

www.ft.com

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Ricardo Reis

@R2Rsquared

3 years

2022 could turn ugly for EMs if: (i) pandemic continues, more lockdowns, tourism closed, (ii) capital reversals due to QE unwinding, (iii) rise in interest rates in US and EZ, (iv) no clear path for paying pandemic debts, (v) elections in Brazil.

Emerging economies cannot afford ‘taper tantrum’ repeat, says IMF’s Gopinath

Fund’s chief economist sounds cautious note as Fed inches closer to dialling back stimulus

www.ft.com

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Ricardo Reis

@R2Rsquared

3 years

Um governo não pode--seja justo, certo, correto, ou popular--encerrar uma atividade económica privada que não causa risco de saúde: o ensino à distância num colégio. Pode desejá-lo, mas não pode mandar. Os candidatos a presidente, e ao seu poder moderador, não têm nada a dizer?

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Ricardo Reis

@R2Rsquared

3 years

Whether expected inflation is transcendental or not surely depends on the monetary policy regime.

Fermat's Library

@fermatslibrary

3 years

Even though we have known that e^π is transcendental since 1930, to this day no one has been able to prove that π^e is transcendental.

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Ricardo Reis

@R2Rsquared

2 years

In 2020-21, Princeton made $12bn in investment gains. In *one year* this flow to its endowment exceeded the stock, built over decades, of every single one but the richest dozen or so universities in the world. An unusual year in markets but, still, wow.

Princeton’s endowment returns continue to support University mission and impact

Princeton reports its endowment returns and value for the fiscal year that ended June 30, 2021.

www.princeton.edu

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Ricardo Reis

@R2Rsquared

3 years

MMT controversies may well inspire new good research on government budget limits. It is helping to swing the pendulum of policy debates towards government spending programs and fiscal activism. Yet, it made it fashionable to irresponsibly ridicule worries about public debt. 11/13

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Ricardo Reis

@R2Rsquared

3 years

Not science, not researchers, but “movement” and “activists”. Not a good view @BadEconTakes

Patricia

@PatriciaNPino

3 years

Having dinner with the MMT crowd in Poznań discussing how far the movement has come in a decade. The enthusiasm of students and activists organising around the world to learn and teach MMT is truly inspiring and fills me with hope. I believe #MMT is now unstoppable.

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Ricardo Reis

@R2Rsquared

2 years

The fall in GDP from stopping any Russian exports in 22Q2 will surely be much lower than the impact that the public health measures had in 20Q2. And, as brave Ukrainians show us every day, some values are worth more than material well being. More is at stake today.

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Ricardo Reis

@R2Rsquared

4 years

Many more cases, I could keep going. But they all depend on the *future*. So: is the explosion in the CBs balance sheet a sure sign of monetization of the debt and of future inflation? No. It might. Or not. It depends on the monetary and fiscal policy that will follow [12/12]

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@R2Rsquared

3 years

Yet, supply-side economic ideas also contributed to a massive rise in US public debt in the last 40 years. Right-wing governments became as prone to have large public deficits as left-wing governments, in the pursuit of cuts in taxes. 5/13

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Ricardo Reis

@R2Rsquared

3 years

To my students, congratulations. It is crucial though to read the fine print: you need to graduate in it, not just choose to study it. With that in mind, the problem set answers are due on Friday.

AEA Journals

@AEAjournals

3 years

Forthcoming in AEJ: Applied Economics: "Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major" by Zachary Bleemer and Aashish Mehta.

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Ricardo Reis

@R2Rsquared

3 years

But MMT ran with it: central banks could "print money" to pay for any amount of spending. At the limit, they had a motto: there is no constraint on how much the government can spend. This is an absurd limit, wrong and backwards: CB reserves are just another form of borrowing 8/13

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Ricardo Reis

@R2Rsquared

3 years

In 80s debates, supply-siders would often fall back to "you don't understand me", repeating "Laffer curve!" endlessly, or stating vacuous accounting identities about how the government collect taxes. Their extreme prediction was repeatedly proven wrong by theory and data. 3/13

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Ricardo Reis

@R2Rsquared

4 years

Macro policy response to Covid-19? Lower barriers to international trade and capital flows If people cant move, let goods and capital move. Let firms adjust suppliers and direct sales to markets in need. Let risk-sharing arrangements have capital flow to those hit the most

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Ricardo Reis

@R2Rsquared

3 years

Every rational inattention paper in economics from now onwards should start with this picture.

Ethan Mollick

@emollick

3 years

No matter the language, we exchange information at 39 bits/second, suggesting a biological limit. Languages that are lower information density are spoken fast (Spanish & Japanese) while denser languages are spoken more slowly (Thai, Vietnamese, Chinese).

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Ricardo Reis

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3 years

Thank you to everyone for the nice messages over the last couple of days. I was surprised, humbled, and especially very honored by the award. Thank you to the @EEANews and to the Yrjö Jahnsson foundation.

EEA

@EEANews

3 years

Ricardo Reis @R2Rsquared & Silvana Tenreyro awarded the 2021 Yrjö Jahnsson Award in Economics. More info at Congratulations to both.

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Ricardo Reis

@R2Rsquared

5 years

You could be home reading the @guardian or @nytimes about how economists don’t study X, Y, or Z. Or you could be in Manchester listening to dozens of papers on X, Y, and Z. #EEAESEM19

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Ricardo Reis

@R2Rsquared

3 years

The 80s supply-siders went to the limit and came up with a motto: lower taxes will lower deficits as a norm, not an exception. Many economists shouted this was backwards. It was an implausible limit case. Textbooks called them "charlatans and cranks" or "silly". 2/13

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Ricardo Reis

@R2Rsquared

2 years

Well-deserved prize given to contributions that had been in my (and others') intermediate macro course for a long time. My main reaction to prizes is to remember the 3-6 people who deserved it just as much for this area of work. In this case they are ...

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2022 was awarded jointly to Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig "for research on banks and financial...

www.nobelprize.org

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Ricardo Reis

@R2Rsquared

3 years

The (approximate) irrelevance of the size of the central bank's balance sheet has only been true post-QE. So it may not be as widely understood. But it is still standard: a boring economist laid it out in Jackson Hole back in 2016 with no controversy. 7/13

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Ricardo Reis

@R2Rsquared

4 years

Research funding from the @ERC_Research seems to have delivered a vaccine. The same ERC whose planned budget was slashed to make room for a larger "recovery package" back in June. Seems like the EU got its economic multipliers wrong on this one. By at least an order of magnitude.

European Research Council (ERC)

@ERC_Research

4 years

Congratulations to ERC grantee Uğur Şahin, CEO of @BioNTech_Group , on this important advance in the development of #COVID19 #vaccine . Fingers crossed! 🇪🇺 #ResearchImpactEU

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@R2Rsquared

3 years

It was a commment on a post, the identity of the poster was irrelevant. Nothing ad hominem in what I wrote, no targeting of anyone. Imagining personal offense to create polemics and rally twitter-mobs is on you.

Nathan "FOIA" Tankus

@NathanTankus

3 years

This is a really disgusting targeting of a young woman who's talking about a specific event and not every single element of MMT. She also said "students and activists", not just "activists". Delete this and spend your time finally googling what the WPA and CCC are.

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Ricardo Reis

@R2Rsquared

4 years

Regulatory policy: Lift restrictions on businesses working on weekends and opening at night. Consider reforms to overtime pay requirements. Plan 24h public transport, public schools open through the summer. Anything to let us work round the clock once quarantine is over. [6/12]

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Ricardo Reis

@R2Rsquared

3 years

MMT starts from a likewise correct result in monetary macro: as central banks now satiate the demand for reserves, govt spending can be paid for by issuing CB reserves. This increase in M0 per se has no impact on interest rates, inflation, nor does it crowd out investment. 6/13

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Ricardo Reis

@R2Rsquared

3 years

Some have called MMT "merely a rethorical exercise" ( @albertobisin ). In debates, MMTers say "you don't understand me", endlessly repeat "functional finance!" or state vacuous accounting identities on the flows between CB, Treasury and markets. 9/13

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Ricardo Reis

@R2Rsquared

3 years

For all the r-g<0 excitement of many (including my own work!), do keep in mind: 1) r-g = 4.2% in 2020 US; 2) In 2021, r is on the rise, g is looking shaky; 3) Govt didn't lock in the low long-term r, is mostly paying at overnight r.

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Ricardo Reis

@R2Rsquared

4 years

For macro, worry about t+1, t+2, ... If economy can offset lost production now by people working nights and weekends in the next few quarters, can stabilize GDP over 1-2 years. Then, focus of policy is on easing *intertemporal substitution*. [3/12]

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Ricardo Reis

@R2Rsquared

2 years

If you'd like to work full time next year as a pre-doc doing research in macroeconomics with @liliana_vvarela , @ilzetzki , @JADHazell , @ben_moll , and myself at the @CFMUK , apply here:

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Ricardo Reis

@R2Rsquared

4 years

As so many others on Twitter, I am mourning the loss of Alberto Alesina. He was one of my graduate school advisors. He was a friend with a big heart and an infectious joy for learning new things.

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Ricardo Reis

@R2Rsquared

3 years

A few years back, at a conference discussing 20 years of central bank independence + inflation targeting in the UK, I compared its inflation performance with everything else tried in the last *four centuries*. See figure below. Arguably it is the best monetary regime *ever*.

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Ricardo Reis

@R2Rsquared

1 year

-- If you want to understand why this is important, read: -- If you want to understand how it works in practice, read: -- And, figures 6 and 7 here show why the move from weekly to daily operations matters:

Central Bank Swap Lines: Evidence on the Effects of the Lender of Last Resort

Abstract. Theory predicts that central-bank lending programs put ceilings on private domestic lending rates, reduce ex post financing risk, and encourage e

academic.oup.com

European Central Bank

@ecb

1 year

Press release: Coordinated central bank action to enhance the provision of US dollar liquidity

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Ricardo Reis

@R2Rsquared

4 years

Budget policy: borrow through public debt. This is the time to run deficits, and plan for huge surpluses next year that pay the debt down. For people that face trouble borrowing to intertemporally substitute, help them overcome those credit constraints. [5/12]

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Ricardo Reis

@R2Rsquared

4 years

Fiscal policy: US tax return deadline (and payments) extended from April 15, 2020 to April 15, 2021. Not a tax holiday, just a 1-year delay on filing and payments. Consider delaying payments on as many tax commitments as possible. [4/12]

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Ricardo Reis

@R2Rsquared

3 years

During my Lamfalussy fellowship at the @BIS_org , I wrote a paper for its annual conference on “The constraint on public debt when r < g but g < m”. A short thread on economic policy implications from the paper. (Ungated at ) 1/14

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@R2Rsquared

4 years

What kind of recovery? There is a similarity between a virus shock in a services economy and a weather shock in an agricultural economy. If so, expect V-shaped recession, quick bounce back, as in XIX centuuy. Goal is to have bounce overshoot, making up for the lost quarter [9/12

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Ricardo Reis

@R2Rsquared

5 years

One May long ago, exams were over and I was waiting to start my summer job. I spent my time in the college library reading JEP articles at random. The following Fall, I applied for a PhD. Here are the editors' suggestions for those who want to do the same.

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Ricardo Reis

@R2Rsquared

3 years

I will be in a panel with Larry Summers ( @LHSummers ), Carmen Reinhart ( @carmenmreinhart ), and Raghu Rajan, discussing "The Tradeoffs of a Higher Federal Debt". Starting in 30 minutes (2pm EST, 8pm CET) at the @nberpubs annual conference on macroeconomics

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Ricardo Reis

@R2Rsquared

3 years

O governo britânico anunciou há pouco mais de uma hora que Portugal é o único país europeu na lista verde das viagens de Verão. Os voos Londres-Lisboa já estão mais caros que Londres-NYC. #mercadosafuncionar

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Ricardo Reis

@R2Rsquared

3 years

As inflation, monetary policy, and economic recovery dominate the economic news, you can catch up tomorrow on the progress being made at the research frontier about each of them. Live via youtube, courtesy of the @nberpubs famous ME group:

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Ricardo Reis

@R2Rsquared

2 years

“Will the free world understand that by trading with the aggressor they fund war and death? Or will it run the business as usual until the war comes to its every doorstep?” By Yuriy Gorodnichenko The day of infamy

The day of infamy

After the attack on Pearl Harbor on December 7, 1941, many Americans were in shock and disbelief. President Roosevelt called...

voxukraine.org

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Ricardo Reis

@R2Rsquared

4 years

Some other good readings: 1) @pogourinchas in summarizing: 2) Greg Mankiw here: 3) @SHamiltonian and @stanveuger on policies 4) @gerardrolanducb on shortages

COVID_2.pdf

drive.google.com

Gerard Roland.

@gerardrolanducb

4 years

As covid-19 leads many households to panic hoarding of toiler paper, etc.. it is useful to remember some basic principles from the economics of shortage. 1/

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Ricardo Reis

@R2Rsquared

3 years

The world has changed since Keynes, and "what if we build an extra bridge" is an out-of-date way to think of fiscal stimulus. Today it is about T, little about G. (A decade ago, I used to write T in a font 4x larger than G in my slides when discussing papers on multipliers 😃)

Noah Williams

@Bellmanequation

3 years

The transfer economy: government consumption ("G" in GDP & models) now makes up only 20.9% of federal government spending (down from 45% in 1990 and 75% in the 1960s) and 76.5% of state & local government spending (down from 89% in 1990).

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Ricardo Reis

@R2Rsquared

3 years

But they had popular hero figures (Laffer, Moore), and an eager political audience that would use any argument to cut taxes. Eventually, they inspired new good research, and helped in swinging the pendulum of policy debates to include some valid supply considerations. 4/13

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Ricardo Reis

@R2Rsquared

3 years

No matter what is your opinion on Catalan independence, and on the events of 2017, persecuting individuals is not a way forward to reach peace. In solidarity with Andreu Mas-Colell.

Alex Mas

@AMLabEcon

3 years

Normally I would not be posting personal developments on this website, but in this case I have a pressing concern. My dad, Spanish economist Andreu Mas-Colell, is dealing with an incredibly difficult and unjust situation. 1/

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@R2Rsquared

3 years

** The need for theory This is a superb thread/article by @bencasselman on the different types of data needed to see if inflation is transitory. But, imho, the paths he points are almost all in wrong directions. Why? Because of lack of *econ theory* to guide the looking at data🧵

Ben Casselman

@bencasselman

3 years

Is inflation really "transitory" as the Fed insists? Will labor shortages ease by fall? Can workers expect more raises? I can't tell you any of that. But I *can* tell you what indicators to watch in this strange moment for the U.S. economy.

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Ricardo Reis

@R2Rsquared

4 years

I am beyond shocked by this. A Nobel-prize level scholar, a wonderful person, and a cherished friend.

Neil Shephard

@shephard_neil

4 years

Very sad today as my Harvard Economics colleague Professor Emmanuel Farhi died unexpected yesterday. His work was very wide ranging, including writing important papers on financial stability.

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Ricardo Reis

@R2Rsquared

5 years

Tenho medo dos julgamentos populares nas redes sociais. Mas a coluna de M. Fátima Bonifácio no @Publico é inadmissível. Dizer que “africanos e ciganos” não “descendem dos Direito Universais do Homem” e que “os ciganos, sobretudo, são inassimiláveis” é de um racismo intolerável.

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Ricardo Reis

@R2Rsquared

3 years

Unsurprisingly, Angus Deaton's last "letter from America", discussed yesterday at #RES2021 , is full of sensible, sharp, and wise observations about the economy, economists and economics. Some highlights:

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Ricardo Reis

@R2Rsquared

3 years

In almost every social science, surveys indicate >95% of academics are left wing. Economics is a complete outlier, a champion of political diversity. I've never understood why. What I would like to learn is how this matters. I would appreciate links to serious analysis of it.

Teresa M. Bejan

@tmbejan

3 years

1) Academic colleagues I otherwise admire have a tendency to, well, *sneer* when the issue of ‘viewpoint’ diversity comes up as below, especially when it comes to conservatives. I have THOUGHTS and some anecdotes. 🧵

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Ricardo Reis

@R2Rsquared

2 years

The combination of monetary-fiscal policies to fight a pandemic recession-deflation, was hard to figure out and mistakes were made. The monetary-fiscal policy mix to fight a large increase in energy prices is easier in comparison. More is at stake today. End of 🧵

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Ricardo Reis

@R2Rsquared

3 years

The preliminary Oct. number for EZ annual inflation is 4.1%. The highest value *ever* since there is a euro (tied with Jul-08). And today Lagarde said that a rise in rates in the next *14 months* is "very unlikely". Emphasis on very. That is some serious, bold, 💪 confidence.

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Ricardo Reis

@R2Rsquared

3 years

On my twitter today: (i) @federalreserve latest speech is on diversity and inclusion, (ii) @WhiteHouseCEA analyses inflation trends, (iii) @potus takes on the job of controling inflation. Not sure about this delegation of tasks and goals, but hey, go for it...

President Biden

@POTUS

3 years

Today’s report shows an increase over last month on inflation. Reversing this trend is a top priority. My Infrastructure bill will bring down costs by reducing bottlenecks and I urge Congress to pass my Build Back Better Act — which will ease inflationary pressures.

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Ricardo Reis

@R2Rsquared

4 years

What about inflation? If L has a binding upper bound, then we are in a rationing economy. Like in war times. The price system is less informative, so worry less about inflation. [8/12]

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Ricardo Reis

@R2Rsquared

4 years

"Neste mundo [em Portugal], os donos disto tudo não são quem tem mais valor, melhores ideias ou mesmo mais dinheiro, mas antes quem tem mais ligações ao poder e capacidade de navegar a teia de exceções."

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Ricardo Reis

@R2Rsquared

4 years

Two weeks ago, I picked 5 books to read for thinking about the macroeconomics of the Covid-19 crisis. Here they are, together with an interview explaining my choices.

Five Books: The Economics of Coronavirus: A Reading List, recommended by Ricardo Reis

The economics of coronavirus: a reading list from Professor Ricardo Reis of LSE, touching on debt, financial repression, free trade and monopoly.

fivebooks.com

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Ricardo Reis

@R2Rsquared

4 years

Ultimate effects of crisis: if instead of one quarter, fall in L is for 2 or 3 quarters, then we are in big trouble. The longer it is, the less scope for intertemporal substitution, the worse is the cumulative loss n output and welfare. It could get very very bad. [10/12]

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Ricardo Reis

@R2Rsquared

4 years

Monetary policy: lower i to lower cost of intertemporal credit. Lend to the economy through LOLR. IMF and cross-border swap lines for international credit. Goal is to prevent shutdown of firms at t that would be solvent at t+2 but have trouble intertemporally substituting [7/12]

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Ricardo Reis

@R2Rsquared

3 years

Congratulations to @drkaenzig for winning the young economist prize at the #ecbforum . Read his great research on causally identifying the effects of carbon pricing on emissions, economic activity, inflation, and especially inequality.

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Ricardo Reis

@R2Rsquared

4 years

Inflation is determined by many factors including expectations. But to first order QE does not by itself generate inflation: it does not change amount of currency in circulation, the interest paid on deposits, the total amount of govt liabilities [4/12]

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