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Foreign Exchange Crises: Basic Model:
Flexible Prices:
Sticky Prices: r a Policy Variable:
So where is there a problem?
Degree of Financial Crisis Model:
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J. Bradford DeLong, Professor of Economics at U.C Berkeley, a Research Associate of the NBER, a Visiting Scholar at the Federal Reserve Bank of San Francisco, and Chair of Berkeley's Political Economy major.
Among his best works are: "Is Increased Price Flexibility Stabilizing?" "Productivity Growth, Convergence, and Welfare," "Noise Trader Risk in Financial Markets," "Equipment Investment and Economic Growth," "Princes and Merchants: European City Growth Before the Industrial Revolution," "Why Does the Stock Market Fluctuate?" "Keynesianism, Pennsylvania-Avenue Style," "America's Peacetime Inflation: The 1970s," "American Fiscal Policy in the Shadow of the Great Depression," "Review of Robert Skidelsky (2000), John Maynard Keynes, volume 3, Fighting for Britain," "Between Meltdown and Moral Hazard: Clinton Administration International Monetary and Financial Policy," "Productivity Growth in the 2000s," "Asset Returns and Economic Growth."
The Eighteen-Year-Old is going to college next year, which means that I need to think about making more money. (The idea that one might write checks to rather than receive checks from universities is now strange to me.) So I have signed up with the Leigh Speakers' Bureau which also handles, among many others: Chris Anderson; Suzanne Berger; Michael Boskin; Kenneth Courtis; Clive Crook; Bill Emmott; Robert H. Frank; William Goetzmann; Douglas J. Holtz-Eakin; Paul Krugman; Bill McKibben; Paul Romer; Jeffrey Sachs; Robert Shiller;James Surowiecki; Martin Wolf; Adrian Wooldridge.
The Eighteen-Year-Old is going to college, which means that I need to think about making more money. (The idea that one might write checks to rather than receive checks from universities still seems very strange to me.) So I have signed up with the Leigh Speakers' Bureau which also handles, among many others: Chris Anderson; Suzanne Berger; Michael Boskin; Kenneth Courtis; Clive Crook; Bill Emmott; Robert H. Frank; William Goetzmann; Douglas J. Holtz-Eakin; Paul Krugman; Bill McKibben; Paul Romer; Jeffrey Sachs; Robert Shiller;James Surowiecki; Martin Wolf; Adrian Wooldridge.
Comment on your paper Some Simple Analytics for a Hard Landing.
I like your stuff. We are in the end soul mates. But after painful hours I found some errors.mainly algebraic, which does impact reasoning.. If I am wrong let me know.
Assuming 1 to 9 are correct
12 is wrong. First term on rhs is negative. An increase in foreign reserves diminishes home GDP.
13 is not correct. Lacking a minus sign before rhs erdeltaR. Sorry I do not have the time to write Greek.
This effects combined 12 prime. All terms are positive. This seems strange that an increase in Foreign Reserves would increase home economic activity. This is because the increase in R has diminsed by 13 the rise in real rates.
Moving on when in 15 foreign banks diminish dollar purchases Ie delta R falls then we have an AD shift to left. as you correctly identify in your figure 3. But this occurs not by 15 as noted but by 15 without minus sign.
I would like to add to your reasoning.
. The AD original position is due to the artificial raising of foreign reserves. Example. Since the China and Asian export boom combined with reserves accumulation this shifted US Ad curve to right, ourwardly. One might say this raised full employment potential over natural level. A reduction in Foreign Reserves will of course shift AD inward with a resultant reduction to a more natural level…
Please keep up the good work.
You are an inspiration to me.
Rolf vom Dorp
Stockholm
Posted by: rolf vom dorp | June 13, 2008 at 01:39 AM