The Fiscal Theory of the Price Level and Inflation

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Inflation comes when people lose faith in the government's ability to pay back its debt. If you can borrow more and the interest rates don't go up, then government debt is a money machine. And if it isn't going to be repaid by taxes, they'll cause inflation. So i an get to root that back to the answer in your question. To day's physcal question, has really nothing to do with the r, greater or less than g. The price o now ir less than g stuff. This is a, it's a broader issue than fiscal theory. It's the question of debt sustained ability. And it's a big deal right now. Does our government have

What unites John Cochrane the finance economist and “grumpy” policy blogger with John Cochrane the accomplished glider pilot? For John, the answer is that each derives from the same habit of mind which seeks to reduce things down to a few fundamental principles and a simple logical structure. And thus, piloting a glider can be understood as an application of optimal portfolio theory, and all of monetary policy can be made to fit within the structure of a single equation.

John joined Tyler to apply that habit of mind to a number of puzzles, including why real interest rates don’t equalize across countries, what explains why high trading volumes and active management persist in finance, how the pandemic has affected his opinion of habit formation theories, his fiscal theory of price level and inflation, the danger of a US sovereign debt crisis, why he thinks Bitcoin will eventually die, his idea for health-status insurance, becoming a national gliding champion, how a Renaissance historian for a father and a book translator for a mother shaped him intellectually, what’s causing the leftward drift in economics, the need to increase competition among universities, how he became libertarian, the benefits of blogging, and more.

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Recorded January 4th, 2021 Other ways to connect

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