Wednesday , January 17 2018
Home / Tony Yates: Long and Variable

Tony Yates: Long and Variable

Long and Variable is a blog about monetary policy and central banks. Authored by Professor Tony Yates (University of Birmingham), this blog is quite detailed and knowledgeable about global monetary policy.

Bitcoin and the underpinning of illicit fundamentals

One approach to pricing Bitcoin [and similar] has to been try to ask oneself what the fundamental value might be in terms of its enduring use and appeal to the community wishing to store value or make payments outside the reach of regulatory and tax authorities. John Cochrane’s recent post has an element of this, attempting to distinguish between “speculative” and “fundamental” values for Bitcoin. Bitcoin’s current high cost of individual payments make it unappealing for small and...

Read More »

Moving the Bank of England to Birmingham won’t help monetary or financial policy

A report in the FT today reveals that Labour commissioned two consulting firms – GFC and Clearpoint – and the report is said to conclude that the BoE’s London location “leads to the regions being underweighted in policy decisions.” The recommendation is to move the Bank of England to Birmingham. This is disheartening.  Two reasons.  First, there are actual things that could be fixed in the Bank of England.  Like the relationship between monetary and fiscal policy at the zero bound; ...

Read More »

Time for an opportunistic inflation

The title of this post is a play on a paper by Orhapnides [ex Governor of the central bank of Cyprus] and Wilcox, the Opportunistic Approach to Disinflation.  That paper described a policymaker that would not seek to engineer low inflation through deliberate monetary policy, but would wait for the good fortune of disinflationary shocks to do it for them, locking in low inflation later. What is the relevance of this now? Post the Great Financial Crisis, the UK and other economies are...

Read More »

The Superintelligence

Warning : amateur, off-topic blogging coming.  Offered in the spirit of pre-Christmas cheer. If you haven’t watched or read Nick Bostrom on the ‘Superintelligence’, you are not a self-respecting cultural omnivore. The ‘superintelligence’ is a hypothetical extreme risk to humanity posed by artificial intelligence [AI].  The scenario is that computer capabilities increase to the point where they become as good or slightly better at general purpose thinking, including applying themselves...

Read More »

Death and austerity

Simon Wren Lewis looks at a recent research paper in the BMJ conjecturing that the Coalition ‘austerity’ program led to a flattening off of the previous downward trend in mortality (and upward trend in life-expectancy), and thus induced deaths that would counter-factually have been avoided with more spending on local authority social care. This seems a highly plausible thesis.  Large high frequency changes in life expectancy around prevailing trends – in the absence of major disease...

Read More »

More bits on Bitcoin

Jean Tirole opines in the FT about the social costs of crypto-currencies, prompted no doubt by the continued surge in the relative price of Bitcoin, depicted below [y axis in £]. Tirole writes: “Bitcoin’s social value is rather elusive to me. Consider seigniorage: an expansion in the money supply traditionally provides the government with extra resources. As it should, the proceeds of issuance should go to the community. In the case of bitcoin, the first minted coins went into private...

Read More »

Brexit impact studies: the clothes of the emperor

The Government is struggling to avoid releasing the complete 58 ‘Brexit impact studies’. David Davis mentioned that these existed ‘in excruciating detail’.  It was later claimed, in a manner that the government must have realised would be taken to be an attempt to avoid publication, that the studies did not in fact exist in the form in which they were requested.  Subsequently, we are to understand, the studies were compiled in a form that they were requested, but with redactions. In...

Read More »

The budget, the OBR, and futurology

The OBR has followed the Bank of England and downgraded its medium/long-term forecast of the growth in the productive potential of the economy.  It now thinks only 1.6% is likely.  This comes after 10 years of zero productivity growth has disappointed forecasts that were forever projecting the old growth rate of 2.5% to resume, something at the time that had a note of pessimism to it, since it was reasonable to speculate early on in the crisis that the productivity level extrapolated...

Read More »

Brexit/Ireland conundrum

In a short table.  Caveat:  Declan Gaffney tells me Ireland are not ok with turning a blind eye to smuggling people and things, as indicated below. The argument for the Y is that it allows Ireland a de facto frictionless border, even if not one in law.   Declan’s point is that the smuggling funds end up in the hands of former terrorists.  At least that is what I read into his tweet. Advertisements

Read More »

Another lump of the lump of labour fallacy

Owen Jones writes in the Guardian that we should consider mandating a compulsory maximum 4 day week.  One of the hopes is that this would ‘slash unemployment and underemployment’. This is a common example of what economists call the ‘lump of labour fallacy’.  The idea that there is a fixed amount of work to be done in our economy, and if we could take some from those who have a lot of it – perhaps more than they really want, which would be a bonus – we could dole it out to those who...

Read More »