Typography

Before 2008, visualizations of central bank activity largely focused on interest rates. These visualizations were easy to make, just a line graph showing a central bank's target rate and the actual overnight rate, perhaps within a narrow channel bounded at the top by the central bank's lending rate and at the bottom by its deposit rate. The one below, pinched from the Economist, is a decent example. But then the credit crisis hit. Rates plunged to zero where they have stayed ever since. Central bank policy moved away from conventional manipulation of the short term rate towards more unconventional policies, thus rendering the classic line graph less relevant. Two of the more important of these new unconventional tools are quantitative and qualitative easing. A good chart must be capable of illustrating the expansion of a central bank's balance sheets (quantitative easing) and contortions within that balance sheet (qualitative easing). In this context, stacked area charts ha...

With cyptocurrencies all the rage these days, I figured I should weigh in. I've done a few dozen posts about the monetary theory behind cryptocoins, so rather than write another, in this post I'm going to describe my somewhat zany experience over the last fourteen or so months with litecoin, one of the bitcoin clones. Curious about bitcoin, I figured I should gain some practical experience with the medium of exchange on which I planned to write over the next few months. So one cold autumn day in 2012 I bit the bullet and transferred some money to VirtEx , Canada's largest online bitcoin exchange, bought a few coins (a small enough amount that I wouldn't wince if their price fell to $0), and then transferred those coins from my Virtex account to my newly downloaded wallet residing on my laptop. Voilà! I was now officially a bitcoiner. ...which wasn't as exciting as I had anticipated. There was little for me to do with my fresh digital pile of coins. I'm not a h...

Steve Williamson recently posted a joke of sorts: What's the difference between a New Keynesian, an Old Monetarist, and a New Monetarist? A New Keynesian thinks no assets matter, an Old Monetarist thinks that some of the assets matter, and a New Monetarist thinks all of the assets matter. While I wouldn't try it around the dinner table, what Steve seems to be referring to here is the question of money. New Keynesians don't have money in their models, Old Monetarists have some narrow aggregate of assets that qualify as M, and New Monetarists like Steve think everything is money-like .* This is a interesting way to describe their differences, but is it right? In this post I'll argue that these divisions aren't so cut and dry. Surprisingly enough, Milton Friedman, an old-fashioned monetarist, was an occasional exponent of the idea that all assets are to some degree money-like. I like to call this the moneyness view. Typically when people think of money they take an e...