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This is us having the priviledge of reading a Nobel laureate muse on his topic of expertise (no, he’s not a macroeconomist or political analyst).

This is from the NYT today on the fed’s move to increase the rate paid on reserves:

“If you perfectly telegraph when you’re going to do it, you might as well do it that day, since so much of interest rate and monetary policy is about expectations,” she said. “It doesn’t matter so much what it is, versus what was expected.”

Maybe I’m reading too much Scott Sumner but I am often concerned that it is a point that people completely miss. Even in the context of the article quoted above, the message is about expectations of the interest rate on reserves or the target rate for the discount window, not inflation, which is the expectation that really matters.

I know that insurance companies don’t give a rat’s ass about what the interest rate is. They pay claims, which are governed by prices, which are sensitive to inflation. It is inflation expectations that will drive insurance rates up, which, of course, fuels ever greater inflation. Are the inflation hawks right? God, who knows, but it isn’t as simple as inflation good, all else, bad.

Careful, now.

Interesting stuff.

Background here

Forgetfulness means you have a good memory (sometimes)?

Now THIS is how a boxer builds his PPV audience.

“Kauto’s talented and flashy like Muhammad Ali, whilst Denman’s a slugger like George Foreman,” he said.

Kauto and Denman are horses.

See here for more brilliant self promotion

From the BBC:

Eddie was informed of his qualification for the Games whilst working as a plasterer and residing temporarily in a Finnish mental hospital due to lack of funds for alternative accommodation (rather than as a patient).

More on Eddie here.  Relatedly, see Eric the Eel

Thanks to Saxton for the pointer.

The front page photo is a heluva draw to the eye.
Interview here.

Ebert reacts (positively) here

Yep

Great blog.

I love investigative scoops on deal machinations. Could read this stuff all day.

If you like it too, I recommend Too Big to Fail.

You callin’ me unproductive?!

What kind of people become middlemen?:

Middlemen are not looked upon fondly; it’s usually a term of derision. It seems that reputation is well-deserved:

The question of how certain types of market-intermediating middlemen can be held in low regard is addressed. A model in which pure rent-seeking middlemen emerge endogenously is provided. Individuals differ according to their persuasiveness and according to their productivity. Those who are highly persuasive but relatively unproductive are the people most likely to become middlemen. However, only productivity differentials are shown to be essential for the emergence of middlemen.

But it’s fun nevertheless. More here.