Roger E. A. Farmer's Macroeconomics Page
Contact Me mailto:rfarmer@econ.ucla.edu
Short Bio
YouTube Videos (More Videos)
| What the Book is About | What Keynes Had to Say | Where the Keynesians Went Wrong |
|
|
|
|
| Part 1
HERE |
Part 2
HERE |
Part 3 HERE |
I will post a series of five videos that describe the contents
of
How the Economy Works:
Confidence Crashes and Self-Fulfilling Prophecies. Here are the first three. The others
will be posted over the course of the next few weeks.
READ THE FIRST CHAPTER HERE.
READ AN EXCLUSIVE
AMAZON Q & A HERE.
Endorsements for How the Economy Works: Glenn Hubbard, Dean of the Columbia Business School, Columbia University, former Chairman of the Council of Economic Advisers, Simon Johnson, Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management, former chief economist at the International Monetary Fund
Endorsements for Expectations Employment and Prices: Daron Acemoglu, Charles P. Kindleberger Professor of Applied Economics, MIT and Co-Editor of Econometrica, William A. Barnett, Oswald Distinguished Professor of Macroeconomics, University of Kansas and Editor, Macroeconomic Dynamics, Jesus Fernandez-Villaverde, Associate Professor of Economics, University of Pennsylvania, Harald Uhlig, Professor and Chair, Department of Economics, The University of Chicago and Co-Editor of Econometrica.
Endorsements for How the Economy Works: Glenn Hubbard, Dean of the Columbia Business School, Columbia University, former Chairman of the Council of Economic Advisers, Simon Johnson, Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management, former chief economist at the International Monetary Fund
Endorsements for Expectations Employment and Prices: Daron Acemoglu, Charles P. Kindleberger Professor of Applied Economics, MIT and Co-Editor of Econometrica, William A. Barnett, Oswald Distinguished Professor of Macroeconomics, University of Kansas and Editor, Macroeconomic Dynamics, Jesus Fernandez-Villaverde, Associate Professor of Economics, University of Pennsylvania, Harald Uhlig, Professor and Chair, Department of Economics, The University of Chicago and Co-Editor of Econometrica.
My Two New Books
2. The Carnegie Council,
3. The Skeptics Distinguished Lecture Series at Caltech (Skeptics Society), Cal Tech, Sunday May 2nd, 2010 2.00 p.m.
Op Eds, Comments and Letters
New Working Papers
Order from Oxford University Press HERE
Order from Amazon HERE
The Stimulus Plan, Unemployment and Economic Theory: Why I Don’t Believe in Fairies. For the past nine months I have been presenting some new ideas at academic conferences where economists have been grappling with the current financial crisis. Boston, Montreal, Amsterdam, London, Cleveland, Sydney, Atlanta … Only the venues change. The participants and the papers are always the same... Financial Times January 28th 2010 HERE
Fiscal Policy Can Reduce Unemployment: But There is a Better Alternative © AVAILABLE HERE. UPDATED 10-22-09 Prepared for the November 2009 meeting of the Carnegie Rochester Conference on Public Policy, “Fiscal Policy in an Era of Unprecedented Budget Deficits.” I explain the current financial crisis as a shift to a high unemployment equilibrium, induced by the self-fulfilling beliefs of market participants about asset prices. I ask two questions. 1) Can fiscal policy help us out of the crisis? 2) Is there an alternative to fiscal policy that is less costly and more effective? The answer to both questions is yes. Computer code for diagrams in the paper is HERE
Expectations Employment and Prices
Farewell to the Natural Rate: Why Unemployment Persists. Most policymakers subscribe to the existence of a natural rate of unemployment. This column provides a visual history of unemployment, vacancies, and inflation in the US and explains why the natural rate hypothesis is false. It demonstrates that the economy can come to rest in an equilibrium at any point on the Beveridge curve. The equilibrium is selected by the confidence of households and firms that pins down asset values. VoxEU January 6th 2010 HERE. YouTube Video of Unemployment and Inflation in Real Time HERE
Confidence, Crashes and Animal Spirits © AVAILABLE HERE. Also available as NBER Working Paper #14846. This paper provides the logic that underpins my recent Financial Times pieces. It offers a new paradigm for macroeconomics in which there may be a continuum of steady state unemployment rates indexed by self-fulfilling beliefs about the value of assets.
Order from Oxford University Press HERE
Order from Amazon HERE
Debt Deficits and Finite Horizons: The Stochastic Case ©. Joint with Carine Nourry and Alain Venditti. available HERE. This paper constructs a stochastic version of Blanchard's perpetual youth model. It should be useful to researchers who are interested in studying the effects of fiscal policy in stochastic macroeconomic models without the representative agent assumption.
The Great Recession Ended in May of 2009 A number of economists, including Chairman Bernanke of the US Federal Reserve, have declared that the current recession is very likely over (Robb, 2009) and two reporters for Forbes (Wesbury and Stein, 2009) have dated the end of the recession to May of 2009. This short piece adds credence to that statement by studying the past behavior of the stock market and the unemployment rate. VoxEU October 5th 2009 HERE.
Understanding Markov-Switching Rational Expectations Models © AVAILABLE HERE. Joint with Dan Waggoner and Tao Zha. This paper provides a set of necessary and sufficient conditions for rational expectations equilibria in models where there is regime switching to be unique.
The Great Recession and the Coming Jobless Recovery. Confidence is slowly returning to the stock market and the S&P is back to the level it reached when President Obama took office in January. This is enough to prevent a further collapse in spending; the Obama stimulus package may even move us into positive territory for US gross domestic product growth. But these ‘green shoots of recovery’ are not enough to create the jobs needed to restore full employment in the US.... Financial Times August 6th 2009 HERE.
A Critical Review of: Animal Spirits: How Human Psychology Drives the Economy and Why it Matters for Global Capitalism, by George A. Akerlof and Robert J. Shiller. © Available Here. The Economic Record, 85(270) 2009, pp, 357-369.
Why Keynes Was Right And Wrong, And Why it Matters. In the FT’s Economists’ Forum, Benn Steil wrote a stimulating piece in which he argued that Keynes was wrong. His argument is that interpretations of Keynesian economics are all based on the assumption that wages and prices are sticky. ... Financial Times May 27th 2009 HERE.
Macroeconomics: Adjusting the Big Picture: Roger Farmer, featured as one of three experts weighing in on how to better handle, and even avoid, the next global financial crisis: Business Week April 16th 2009 HERE
How the Crisis Affects the
Global Economy
Bah Humbug: Stagflation is Just Around the Corner Economic policy is in a muddle. Academic voices are flooding the blogosphere and the intelligent policymaker can be forgiven for being unclear as to which side to listen to. Financial Times April 6th 2009 HERE.
Reactions Economists View April 7th 2009
Unemployment, Vacancies and Inflation in Real Time
Japan's Price Keeping Operations Can Succeed Sir, In your editorial “Political paralysis” (February 25), you disparage the idea that the Japanese government should start “price-keeping operations” by, in your words, “spending 25,000bn yen of public money to prop up the stock market”. Financial Times February 27th 2009 HERE.
How to Fix the Banks We don’t need to nationalise the banks. We don’t need to guarantee bad assets. We don’t need government to own voting shares in private banks. We don’t need to create a bad bank full of toxic assets. Financial Times February 9th 2009 HERE.
YouTube: ASI Power Summit in Carlsbad
The Government Should Target the Stock Market This column contains a synopsis of the economics that underlies the Financial Times articles listed below. VoxEU February 4th 2009 HERE.
Reactions Brad-Delong US News and World Report March 3 2009
A New Monetary Policy for the 21st Century For the past seventy years, policy makers have relied on fiscal and monetary policy to combat recessions. Monetary policy works by lowering real interest rates and stimulating private expenditure. Financial Times January 12th 2009 HERE.
Comments FT
How to Prevent the Great Depression of 2009 The US recession that began in December 2007 resulted in 403,000 lost jobs in September, 320,000 in October and 533,000 jobs in November. Projections for 2009 are ominous. Financial Times December 30th, 2008 HERE
Reactions Marginal Revolution Economists View The Glittering Eye Worthwhile Canadian Initiative
This Page Supported by NSF Grant SBR 0720839
Last Updated 09-02-10