26-11-2002 13:10									#91
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Krugman is one of the few people stateside who realise what's going on. The rest is happily dreaming in their little fantasy world.

Now for the controversy... Sten: What output gap ? US is still a couple percent above trend...

	26-11-2002 15:44									#92
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quote: Originally posted by DrSpike Dan's fault *loose monetary policy* ....

Ok.

Now about forecasting, I'm quoting Baum here: (I’m you dislike her as much as you like Krugman)

”for gross domestic product, Englund found the Fed's average forecast error was 0.8 percentage point for the current year and 1.2 percentage points for the following year.

MMS's own forecasts for the same 1985-to-the-present period yielded a miss of 0.7 percentage point and 1.2 percentage point, respectively, for the current and following year.

``The interesting thing is that if the Fed had just forecast 2.6 percent every year for real GDP, its forecast error would have been the same: 1.2 percentage points,'' Englund says.”

Being on average 1.2% wrong for the following year seems pretty significant to me, considering rate changes only kick in after a year. (give or take a couple of months, depending on the estimate of course)

quote: *To clarify the dominant paradigm post* I feel you would benefit from reading what you can find about monetary policy in the 80s, where monetary aggregates were king. You see the question of whether to target monetary aggregates or have an explicit inflation target may seem like no big deal to the casual observer. It turns out to make a huge difference.......due to where in relative terms most of the uncertainty lies, in the real sector or the monetary sector. Hehe, this is back to Gordon again, IIRC he did some of the key work in the 80s on this very topic. It turns out that velocity (in AS's quantity theory of money equation earlier) changes make monetary aggregates too slippery, even when you can control them, which you only can to a limited extent.

Velocity fluctuates within a given period, but in the long run money supply equals nominal GDP. (read Gordon)

I don't know the finer aspects of the Fed's attempt to monetarism (you’re free to lecture on that) but they didn’t seem able to do what I have in mind with targeting money supply.

I took a look at M3 on the Januaries of each year from 79 till 89 (IIRC the fed adopted monetarism in 79), and calculated the growth from the previous January:

79-80: 10%
80-81: 10.8%
81-82: 12.5%
82-83: 9.4%
83-84: 9.1%
84-85: 11.2%
85-86: 7.1%
86-87: 9.1%
87-88: 5.1%
88-89: 6%

So, did they have a M3 growth target, and if yes, what was it?

	27-11-2002 01:50									#93
	Increase Your PM Length

quote: Originally posted by DrSpike I am prepared to match my 2003-2005 forecasts against any that wish to participate. Later though, I have to go pompously teach some future clueless people material written by the present day clueless.

Ok I'll rise to that

My forecasts are output-gap based.


GROWTH:

USA:
2001: 0.3%
2002: 2.5%
2003: 2.7%
2004: 3.7%
2005: 3.5%
2006-10: 3.7%
2001-10: 3.1%

EU15:
2001: 1.6%
2002: 0.8%
2003: 1.7%
2004: 2.7%
2005: 2.5%
2006-10: 2.8%
2001-10: 2.3% (2.8% adjusted)

Japan:
2001: -0.3%
2002: -0.2%
2003: 1%
2004: 1.3%
2005: 1.3%
2006-10: 1.7%
2001-10: 1.2% (1.5% adjusted)


UNEMPLOYMENT

USA:
2001: 4.8%
2002: 5.7%
2003: 6.0%
2004: 5.8%
2005: 5.5%
2010: 4.2%

EU15:
2001: 7.3%
2002: 7.6%
2003: 8.0%
2004: 8.2%
2005: 8.2%
2010: 7.0%

Japan:
2001: 5.0%
2002: 5.4%
2003: 5.7%
2004: 5.5%
2005: 5.3%
2010: 3.5%

(edited with new OECD estimates of the output gap)

Please note that when comparing US growth the the EU15 and Japan that there is a discrepancy between reported growth rates and the share of US GDP at current prices and PPPs - this amounted to 0.46% a year for the EU in the period 1970-2001 and 0.39% a year for Japan - the 'adjusted' figure corrects for this.

On a side note has anyone noticed the sharp closing of the gap between US and EU population growth? - It has halved in the last 5 years to 0.5%

Year, USA, EU
1997: 1.2% 0.2%
1998: 1.2% 0.3%
1999: 1.2% 0.4%
2000: 1.1% 0.4%
2001: 1.0% 0.4%
2002: 0.9% 0.4%

	27-11-2002 02:45									#94
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Colon:

Your post confused me.......not sure about the purpose of my first quote in your post (*edit* unless you were agreeing with my earlier points - I didn't consider that on first reading ). Did I say something about forecasting, or is it just a general query?

But anyway I read the article. It doesn't say anything controversial.......sometimes forecasting is hard, but on average central banks do at least as good a job as the private sector, and probably a better job, depending on whose study you place most weight on. Romer's study (the one that says the fed beats the private sector on average) is required reading.......very informative and thorough. I haven't seen the other one so I can't comment. The time horizon looks a little short though.

Regarding the targetting of monetary aggregates you said it all. If I had had those numbers handy I would have posted them along with the post that you quote.

Quick overview of the issues for any interested:

It is important to realise the aim of the dominant paradigm which I outlined and the aim of targeting monetary aggregates is the same: macroeconomic stabilisation. The key model for understanding these issues in the short run is IS-LM (check it out in Gordon, it is a relatively simple yet very powerful model), in which the interest rate and equilibrium output are determined by the interaction of the real side of the economy and the monetary side.

Now the monetary side in the simplest exposition has a vertical money supply curve (ie it is whatever level the CB decides) and a money demand equation that shows that more money is demanded for transaction purposes as interest rates fall, and the opportunity cost of holding cash decreases.

If the CB can indeed control money supply, and money demand is known with certainty then it doesn't matter if you use open market operations to hit money supply (and hence interest rate) targets consistent with output stabilisation, or you use interest rates directly to target inflation directly. But of course (as Colon's figures indicate) the money supply is hard to target effectively, and, what is more, velocity changes mean money demand is very uncertain, so that even if you could hit the money supply target there are troubles with attaining the desired goal.

So what is the solution?

Well the solution we use is to set interest rates directly (in practice to hit an inflation target), and allow the money supply to adjust to whatever level of demand is consistent at that rate. The LM curve in the model hence becomes horizontal at whatever rate the CB sets. This procedure can be shown under conditions of uncertainty to be the best procedure for macroeconomic stabilisation.

Now it *is* important to keep an eye on monetary aggregates, but it is more important not to retain the unhealthy obsession with them that is the legacy of the 80s. You cannot argue with the logic of the quantity equation material in the long run.........but in the long run, as Keynes famously said, we are all dead.

Long live the dominant paradigm. Hope that helps.

	27-11-2002 03:21									#95
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In physics, statistical mechanics is used to bridge the gap between quantum/atomic/molecular properties and macro properties such as temperature and the like. Is there any corresponding concept that ties together micro and macro economics?

	27-11-2002 03:43									#96
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Yes and no.

There are microfoundations to much modern macroeconomics, but to examine macro issues rigorously in this way is very technical, and requires compromise elsewhere in the models to make them useable.

Much practical macro is more touchy-feely than micro......with the focus on building models of aggregate behaviour that help explain macro fluctuations, and reflect micro considerations without explicitly being derived from them.

The macro wars of the last 20 years have been between the new classicals, who believe strongly in microfoundations, and build intertemporal utility maximisation models with rational expectations, and the new keynesians, who believe in the logic of IS-LM and AS-AD, and try and provide some micro justification for the nominal rigidites that are necessary for these models to accurately reflect the path of key variables over the economic cycle.

I am strongly in the 2nd camp........I get into trouble for writing how silly some of the intertemporal maximisation models (like real business cycle models) are........but hey, it's the pursuit of truth that matters above all else, right?

	27-11-2002 14:25									#97
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Spike:

"Now it *is* important to keep an eye on monetary aggregates..."

Fine. But you think velocity changes a lot, do you not ? If you look at M3 vs nominal GDP from 1996 to now, you get, I repeat myself, "Velocity changes affecting the aggregates by 3-5 % a year, over several years".

Explanation without including asset-related transactions and net imports ?

When I'm at digging up earlier questions:

Are you denying that the Fed's real mandate is to sustain the viability of the financial sector at all cost ?

	27-11-2002 14:37									#98
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quote: Originally posted by HershOstropoler Fine. But you think velocity changes a lot, do you not ? If you look at M3 vs nominal GDP from 1996 to now, you get, I repeat myself, "Velocity changes affecting the aggregates by 3-5 % a year, over several years".

So you see now the point about which instrument to use to hit what target, and how uncertainty affects the best choice? Don't quite see the point here.

And of course the mandate of the fed is not to sustain the financial sector.........that is ludicrous........I do not know why you would say this; it is legally wrong, theoretically wrong, and inconsistent with the evidence.

	27-11-2002 15:16									#99
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"So you see now the point about which instrument to use to hit what target, and how uncertainty affects the best choice?"

I have no idea to what you refer there.

"Don't quite see the point here."

Explain the velocity changes. Or are you just taking them as force majeure, like death, taxes and the salzburg weather ?

"And of course the mandate of the fed is not to sustain the financial sector.........that is ludicrous........I do not know why you would say this"

The Fed has, in part as a consequence of the great depression, in part as a consequence of the regional reserve banks being quasi-owned by the commercial banks, a policy to sustain the viability of the financial sector at all cost.

The Fed sees it as its its responsibility to ensure financial stability in the economy. Disagree ? The Fed does use its regulatory and supervisory powers to ensure that the financial system will remain resilient. Disagree ? And the Federal Reserve is ready to use the discount window and other tools to protect the financial system. Disagree ?

	27-11-2002 15:30									#100
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There is no way I know of to accurately model velocity changes.....the practical problem is to pick the best target given conditions of uncertainty and pick the best instrument to hit that target. This is what lies behind the dominant paradigm stuff I posted earlier, and clarifies why I told you before not to have an unhealthy obsession with monetary aggregates. But anyway I think that is clear now, so onward.

quote: Originally posted by HershOstropoler "And of course the mandate of the fed is not to sustain the financial sector.........that is ludicrous........I do not know why you would say this" The Fed has, in part as a consequence of the great depression, in part as a consequence of the regional reserve banks being quasi-owned by the commercial banks, a policy to sustain the viability of the financial sector at all cost. The Fed sees it as its its responsibility to ensure financial stability in the economy. Disagree ? The Fed does use its regulatory and supervisory powers to ensure that the financial system will remain resilient. Disagree ? And the Federal Reserve is ready to use the discount window and other tools to protect the financial system. Disagree ?

Right, the fed (or any CB) is responsible for financial stability, and it does a lot in this regard so I agree with the first 2 statements. It absolutely does *not* use monetary policy with the aim of 'sustaining' financial markets; rather it tries to hit the inflation target to which it is legally bound. You're trying (it seems), to make a case for monetary policy being too loose in your opinion because the fed's real aim is to protect stockmarkets. Now there are things you can credibly criticise the fed for. This is not one of them.

	27-11-2002 15:42									#101
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"There is no way I know of to accurately model velocity changes...."

Right. However do asset markets have an effect on velocity as measured by money supply v output ?

"....I agree with the first 2 statements. It absolutely does *not* use monetary policy with the aim of 'sustaining' financial markets..."

Point 1-3 are all from here:

http://www.federalreserve.gov/Board...121/default.htm

quote: And at times of extreme threat to financial stability, the Federal Reserve stands ready to use the discount window and other tools to protect the financial system…

Or:

http://www.federalreserve.gov/faq.htm#frsq2

quote: the Federal Reserve's duties include conducting the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices; promoting the stability of the financial system...

And this is the official sugarcoated version, always tied into and justified by economic needs. Anyway, the stability of the financial system is the key task of the Fed - everything else is icing on the cake.

The Fed has prepared markets for a while for unconventional operations, Bernanke's speech is going quite far. Of course it is all theoretical, he says... of course.

	27-11-2002 16:02									#102
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The second quote is fine........the CB plays all sorts of roles in financial regulation and as lender of last resort......these are key roles in financial stability.

The phrasing in Bernanke's article does surprise me..........I suspect if pressed he would state as I did that the main aim of *monetary* policy is the inflation (and hence output/growth) target. He is not suggesting that the fed would emphasise, say, stock market valuations over the aforementioned targets, which I what I thought you were driving at as part of your quest to paint the fed as negligent.

I just wanted to make the point that the fed doesn't subordinate monetary policy to stock market issues over the targets discussed. You may not have been angling for that, but that was my impression from past posts.

	27-11-2002 16:17									#103
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I said financial system/sector whatever. Includes banks, other lenders, general liquidity concerns, about anything credit-related. "systemic risk" scare. The stock market is a side issue for the Fed, unless a crash poses the risk of doing damage to the financial system. Hence it did not bail out worldcom, but LTCM (yes, I know, it was an indirect bailout).

"The phrasing in Bernanke's article does surprise me..."

Doesn't surprise me at all. Talk like that has been gradually building up.

I wonder how Sten likes the idea of the Fed going for the full yield curve, and including corporate bonds.

	27-11-2002 16:30									#104
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Ok, fine. It may be my imagination but I think we are really getting somewhere with the recent exchanges. So tell me what ideas I have managed to sell, and which ones I haven't.

Do you still believe the fed was wrong to slash interest rates after the dot com crash? Do you think the behaviour of monetary aggregates is indicative of negligence on the part of the fed in this regard? Do you believe any present imbalances are the 'fault' of the fed? Do you still believe 50/50 on the US becoming Japan, because of your beliefs regarding the other 3?

As an aside, Bernanke's article is quite lucid, and may help bolster my stated position on the last question, as well as reinforcing many of the points I made in the deflationary spiral debate.

	27-11-2002 16:44									#105
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"Do you still believe the fed was wrong to slash interest rates after the dot com crash?"

Wrong question. We have not only had a dotcom crash, there's much more going on. Also this is not a simple yes/no question, there are 525 bps for a differentiated answer.

Cuts yes. Whether it has gone too far is another question; in the current environment I think it has.

"Do you think the behaviour of monetary aggregates is indicative of negligence on the part of the fed in this regard?"

The behaviour of monetary aggregates is indicative of the Fed negligence mostly from 1997-2000.

"Do you believe any present imbalances are the 'fault' of the fed?"

Yes.

"Do you still believe 50/50 on the US becoming Japan"

Yes. I see two main scenarios for 2003-5: One is a real recession, one is sluggish growth that maintains the imbalances and lowers the trend growth rate. The third one is a liquidation of imbalances along sluggish growth, but that is a quite optimistic view IMO.

	27-11-2002 16:53									#106
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Hmm, not so much progress then.

But, the future battleground is now well defined, which is a good step.

I will return to your last post anon. For now I must stop using this thread as an excuse not to think about my work.

	27-11-2002 16:58									#107
	Remove this text

"Hmm, not so much progress then."

Exactly zero from your POV. I know the standard economic thinking, so reiterating it won't have much effect apart from being tiring.

Try something unusual. Say, explain how money velocity and asset markets are connected IYO.

Edit: I should add that the key to the disagreement is the relevance of monetary aggregates; while I do not set them as an absolute guide I think they are more relevant than you think they are, especially taken together with the current account balance, savings/financing rates and asset price developments. All that sent a clear message.

Last edited by HershOstropoler on 27-11-2002 at 17:06

	27-11-2002 17:09									#108
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quote: Originally posted by HershOstropoler "Hmm, not so much progress then." Exactly zero from your POV. I know the standard economic thinking, so reiterating it won't have much effect apart from being tiring.

That's not quite true.......I definitely made a lot of progress in the initial deflation debate. And as I'm sure you would agree there are inevitably limits to your knowledge of 'standard economic thinking', and you can't criticise what you don't fully understand. It's important to understand why the 'standard' position differs from yours, and in doing so get some perspective on your criticisms. Hopefully I'm helping a bit in that regard, even if our prior fights lead to you to state otherwise. I don't care what you state though.....my agenda is solely in raising the knowledge of those who care enough to think about issues that everyone should care about IMO.

Enough. I'm closing my mail client. The HOD will be after me if I don't finish writing this exam paper today.

	27-11-2002 17:17									#109
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"I definitely made a lot of progress in the initial deflation debate."

Not that I know of. You may have gained a clearer picture of my views, but they haven't changed.

"And as I'm sure you would agree there are inevitably limits to your knowledge of 'standard economic thinking'..."

There are inevitably limits to every knowledge, DrObvious. Even, dare you think it, yours. However everything you produced in your capacity as a living econ textbook was easily within those limits as far as I'm concerned.

	28-11-2002 03:38									#110
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This thread is definately better than the MBT thread!



By the way, I haven't read the full analysis of Bernanke's speech by my contemporaries, but I think the Fed would have to be very careful in their choice of technique if they wanted to start playing more (coupon passes) further out on the long end of the yield curve. Targeting yield levels (like currency pegs) would be a very bad idea, but just buying some paper periodically might help a little. Of course we have seen lately (at least through early October) that lower Treasury yields can actually drive money away from corporations as investors chase the performance momentum of Govy bonds. The steep shape of today's yield curve in the States (300bp from 2yr to 30yr) says that the Fed is stepping on the gas pretty hard and we had better hold on when the wheels catch.

Concern about deflation in Japan still sounds silly to a guy who grew up hearing how the Japanese economy was totally export driven and domestic consumer goods were all priced through the roof. It seems to me that what they have needed for a while is aggressive deflation so that goods are appropriately priced. But that would be hard for a protectionist state to institute.


[Rant mode] Why doesn't anyone understand what the survey numbers like the Chicago Purchasing Manager Index mean. It annoys the hell out of me to hear how Prices Paid declined when it really accelerated at a slightly slower rate, etc...

Last edited by Sten Sture on 28-11-2002 at 04:38

	28-11-2002 17:21									#111
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quote: Originally posted by DrSpike Colon: Your post confused me.......not sure about the purpose of my first quote in your post (*edit* unless you were agreeing with my earlier points - I didn't consider that on first reading ). Did I say something about forecasting, or is it just a general query?

No, _I_ said something about forecasting. I had to slap my post regarding forecasting repeatedly in your face remember?

quote: But anyway I read the article. It doesn't say anything controversial.......

My point was that forecastes are very unreliable and that therefore basing policies on them has plenty of risks attached.

quote: Regarding the targetting of monetary aggregates you said it all. If I had had those numbers handy I would have posted them along with the post that you quote.

I didn't have them handy. I looked up the M3 data at the site of the Federal Reserve and then calculated the growth. Doing some research yourself, instead of parroting handbooks, is part of economics too ya know.

quote: Quick overview of the issues for any interested:

You could just as well tell everyone to buy Gordon's handbook so that you won't have to tire yourself with all this typing.

	28-11-2002 18:08									#112
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quote: Originally posted by Sten Sture Concern about deflation in Japan still sounds silly to a guy who grew up hearing how the Japanese economy was totally export driven and domestic consumer goods were all priced through the roof.

I think there's more myth than truth to that. During the 60's there was hardly any inflation in Japan from 1961 to 1970, while exports grew 232%. It was due productivity gains that the growth of output could be sustained without spiralling inflation.
It could only have been export-driven, if the growth of exports allowed such scale of economies that higher output could be sustained without price hikes, but that seems a bit questionable.

	28-11-2002 18:57									#113
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quote: Originally posted by Colon I didn't have them handy. I looked up the M3 data at the site of the Federal Reserve and then calculated the growth. Doing some research yourself, instead of parroting handbooks, is part of economics too ya know. You could just as well tell everyone to buy Gordon's handbook so that you won't have to tire yourself with all this typing.

For god's sake......I posted some helpful info relevant to the debate (largely because another poster PM'ed me to encourage me not to just give up) for anyone to read (or not), and I just get abuse.

If people in this thread knew all the basic boring stuff then sure, we could discuss the sorts of issues I discuss with my colleagues, like my actual research; I'd love that. But you don't, and that isn't a bad reflection on anyone that posts here - it is just a fact. So I spend time talking about core macro material - I do that because it is the most important stuff to understand, that is precisely why it is core material.

As an aside to Roland, please reread the deflation debate. You started with a statement about deflation not being a problem in Japan, and went on to display a flawed understanding of some key points - it is insulting for you to suggest the discussion we had there did not raise your understanding of the issues in any way.

I can't be assed with this any more. I enjoy the debating, part of which is the cut and thrust of aspersions, but if I am just going to be constantly berated for posting about orthodox economic thought because a) you already know it, Roland or b) you could just look it up anyway, Colon, then there isn't much point. Of course neither a) nor b) are actually true, as these threads have quite clearly shown, but that seems not to matter.

	28-11-2002 19:07									#114
	Enter the AD-FREE zone

"You started with a statement about deflation not being a problem in Japan, and went on to display a flawed understanding of some key points"

Sigh....

You started with a run of the mill deflation argument. IIRC just before the point you refer to, I asked you to explain on that basis the deflationary recessions pre WW II. When you didn't I tried to lure you out of the reserve with the malinvestment liquidation thing (has some merit IMO, but I know it drives your ilk nuts), but it didn't work.

"it is insulting for you to suggest the discussion we had there did not raise your understanding of the issues in any way."

I'm not trying to insult you or troll you, but what you said was in no way new to me. Absolutely honestly.

"we could discuss the sorts of issues I discuss with my colleagues, like my actual research; I'd love that."

How about just giving it a try, instead of assuming that we are all clueless ? If it goes over our heads we'll let you know.

You mentioned an article of yours some way back. I asked you for a reference - nothing.

	28-11-2002 19:08									#115
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Spikey, why don't you accept that we actually *know* the basics? Even if it isn't true, let us live in our blissful ignorance, and debate like you debate with your colleagues.

That we require your stamp of approval before you'll debate with us is just ridiculous.

	28-11-2002 20:26									#116
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quote: Originally posted by Colon That we require your stamp of approval before you'll debate with us is just ridiculous.

Agreed.

However, "the basics" covers a huge area of material, and I'm sorry (I know this will rile you) but neither of you have any economic background that I am aware of. Now you can read journalistic articles, maybe even venture towards more technical material at times, but you are not economists, and that shows in a lot of the posts that you make. What is more there is no way we could discuss my work. That is not meant as an insult, I'm sure if you studied economics for as long as I have we could have that discussion - but you haven't.

However there is a huge amount of practical economics I can talk about, but when I correct your misconceptions I (quite rightly) get asked how I know what I know. Then I explain the models that economists use to think about the issue under discussion and I get accused of hiding behind textbooks, and being blinkered and orthodox.

Let me be clear. Every single one of the misconceptions I have identified whilst posting here would be identified by any other professional economist. You can choose to believe that you have more insight than professional economists, and hence it is they that are wrong not you, but I doubt even Roland believes that in his heart......it is just ludicrous.

But anyway, it doesn't matter, it seems clear you two do not wish my input, and that is fine. Carry on the way you are now......hell I prefer that to the many people I know who don't give a damn about economic issues, that is why I started posting here in the first place - I thought I could make a difference. But no matter, carry on, and I wish you both well.

Simon

	28-11-2002 21:01									#117
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Let's get to the heart of the matter:

"What is more there is no way we could discuss my work."

Indeed, we can't discuss your work as we don't know it. Even if you do not want to discuss it, I'm interested in what you write, esp on deflation (trap) issues. So, why don't you tell me the reference ? PM me if you want.

"You can choose to believe that you have more insight than professional economists, and hence it is they that are wrong not you, but I doubt even Roland believes that in his heart......it is just ludicrous."

It is ludicrous to put so much value on "professional" in social sciences. I have no such prejudice or should I say illusion about my profession - maybe we should find us some juicy legal issue....

"if you studied economics for as long as I have we could have that discussion - but you haven't."

How can we know ?

	28-11-2002 21:08									#118
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Did I miss something? Doc, you say you identified misconceptions? Where?

	28-11-2002 21:10									#119
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Oh, and your profile says you're born in 1978.

"if you studied economics for as long as I have "

???

	28-11-2002 21:29									#120
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quote: Originally posted by HershOstropoler Indeed, we can't discuss your work as we don't know it. Even if you do not want to discuss it, I'm interested in what you write, esp on deflation (trap) issues. So, why don't you tell me the reference ? PM me if you want. "You can choose to believe that you have more insight than professional economists, and hence it is they that are wrong not you, but I doubt even Roland believes that in his heart......it is just ludicrous." It is ludicrous to put so much value on "professional" in social sciences. I have no such prejudice or should I say illusion about my profession - maybe we should find us some juicy legal issue....

Why are you interested in the blinkered orthodox nonsense that I write? I don't have a copy of the article (as I said before it was a journalistic piece), but I can send you a hard copy if you really want, though it just makes the points I made in the thread. My academic work is in econometric modelling of labour markets......believe me I am not being up my own ass when I say I will not discuss it with you. Again I can send you papers if you doubt I have any academic credentials, as you have implied several times.

To your second point:

It is definitely not wrong to place emphasis on 'professional' with the social science of economics. Economics is a technical subject; you have a surprising amount of knowledge of facts for a non-economist but no structure, which is why you have misconceptions. It was my belief I could help, but since you believe there is no value in an economist's way of analysing issues, and that all opinions are equally valid, I do not think so any more.

And that's just it Roland: should we discuss a legal issue and you said to me "Sorry, you've misunderstood that, in fact it's like this _insert legal explanation_", I would accept you have more insight and go about my business with a new slightly better understanding of the legal system. I am intellectually secure, I know my skills, and I know my limitations. Your inability to admit my posts on deflation/monetary targeting/NAIRU/Solow model/various monetary policy issues all provided you any insight that you had previously not considered is, quite frankly, in my opinion unbelievable.