Books: Inside the Economist's Mind (I.T.E.M.) and Getting It Wrong

This Blog hosts discussion of issues relevant to the book, Inside the Economist's Mind, coedited by Nobel Laureate Paul A. Samuelson and William A. Barnett, published by Wiley/Blackwell, and the newer book by William A. Barnett, Getting It Wrong, published by MIT Press.


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William A. Barnett is Oswald Distinguished Professor of Macroeconomics at the University of Kansas and Director of the Center for Financial Stability in New York City. He was previously Research Economist at the Board of Governors of the Federal Reserve System in Washington, DC; Stuart Centennial Professor of Economics at the University of Texas at Austin; and Professor of Economics at Washington University in St. Louis. William Barnett has been a leading researcher in macroeconomics and econometrics. He is one of the pioneers in the study of chaos and nonlinearity in socioeconomic contexts, as well as a major figure in the study of the aggregation problem. He is Editor of the Emerald Press monograph series International Symposia in Economic Theory and Econometrics, and Editor of the journal Macroeconomic Dynamics, published by Cambridge University Press. He received his B.S. degree from M.I.T., his M.B.A. from the University of California at Berkeley, and his M.A. and Ph.D. from Carnegie Mellon University. He has published 20 books (as either author or editor) and over 140 articles in professional journals. His research has been published in 7 languages.



COEDITOR: PAUL A. SAMUELSON

The book, Inside the Economist's Mind, is coedited by Paul A. Samuelson and William A. Barnett. Although this Blog is hosted solely by the latter coeditor, the following is the information in the book's front matter about Paul Samuelson:

Paul A. Samuelson was the first American to win the Nobel Prize in Economics. He is Professor Emeritus of Economics and Institute Professor at the Massachusetts Institute of Technology. Institute Professor is the highest rank awarded by MIT. His landmark 1947 book, Foundations of Economic Analysis, based upon his Ph.D. dissertation at Harvard University, established him as "the economists' economist" by raising the standards of the entire profession. Paul Samuelson's classic textbook, Economics, first published in 1948, is among the most successful textbooks ever published in the field. The book's 16 editions have sold over four million copies and have been translated into 41 languages. He received his B.A. degree from the University of Chicago and his M.A. and Ph.D. from Harvard University. As one of the profession's most productive scholars for over a half-century, he remains an intellectual force of towering stature.

Monday, December 09, 2013

The Godfather

It seems that I now am "the Godfather" on the Market Monetarist blog site.  Better be careful! 

Saturday, November 02, 2013

Why Science Works

A recent blog post in ScienceBlog provides interesting insights into the nature of science, with emphasis on physics and economics.

Friday, October 11, 2013

Higuchi Award

The first Higuchi Award in economics.  Also look here.

Friday, October 04, 2013

The Fed

Thursday, September 26, 2013

The Right Measure of the Money Supply

Peter Ireland at the Shadow Open Market Committee just published an excellent article, "The Right Measure of Money Supply," on the e21 web site.

Wednesday, September 18, 2013

Book Review of Getting It Wrong in the Economic Record

This interesting book review pairs my book, Getting It Wrong, with Ben Bernanke's new book and compares the two.  The two paired reviews appeared in the Economic Record, the journal of the Australian Economic Association.


Sunday, September 15, 2013

Book to appear soon.

Sunday, May 19, 2013

YouTube Video

I don't know who produced this YouTube video about Divisia monetary aggregates, but it certainly is interesting:

http://www.youtube.com/watch?v=u267ucGLcTo

Sunday, April 07, 2013

British Divisia M4

I just noticed a post on a British blog about the Bank of England's Divisia M4.  It's interesting:

http://wonkery.co.uk/blog/2013/3/30/divisia-money-and-ngdp

The blog is amusingly called "wonkery," maintained by Duncan Brown.

He also has another interesting post on that subject:

http://wonkery.co.uk/blog/2013/10/4/money-beats-credit

Thursday, March 28, 2013

Businessweek Article

An article about my book, Getting It Wrong, just appeared in Bloomberg Businessweek's April 1-7, 2013 issue on pp. 18-19.  The title of the article is The Fed May be Miscounting the Money.  Peter Coy, the author of the article and economics editor of the magazine, unfortunately neglected to mention that interest rates for the past three years have been constant at near zero, so could not possibly have had explanatory value about the extreme volatility of the economy during those years.  Otherwise the article does an excellent job of extracting important matters from a very technical literature and succeeds in making the subject widely accessible.

The article also appears in the magazine's online edition and has been translated into Chinese.

Monday, February 11, 2013

American Publishers Book Award

I have won the American Publishers Award for Professional and Scholarly Excellence (the PROSE Award) for the best book published in economics during 2012 for my MIT Press book, Getting It Wrong.

Tuesday, February 05, 2013

Bank of England Divisia Monetary Aggregates

There have been amendments to the Bank of England's Divisia monetary aggregates.

Sunday, January 27, 2013

Modern Macro

There is an interesting article about modern macro in the latest Economist magazine, Jan 19, 2013.

Tuesday, November 06, 2012

KC Star Op Ed

My op ed on time inconsistency of Fed monetary policy appeared today (Tuesday, Nov 6, 2012)  in the Kansas City Star on p. C10.  The title is "Fed's Current Stance Is Tragically Wrong."  The in-print version looks better, since includes my photo.

Tuesday, September 18, 2012

WIBW Radio Interview

Interview with me on WIBW radio station in Topeka on Sept 14, 2012, hosted by Deb Albertson.  The topic was QE3.

Tuesday, August 07, 2012

Forbes Article about Getting It Wrong

A very interesting article about my book, Getting It Wrong, just appeared in Forbes magazine.

Friday, July 27, 2012

Safe Assets, Money, and the Output Gap

There is an excellent post about the current output gap and its connection with CFS Divisia M4 on July 26, 2012.  The post, "Safe Assets, Money, and the Output Gap" is by David Beckworth.  It is on the Wall Street Pit and Beckworth's own blog, called Macro and Other Market Musings.

Thursday, July 05, 2012

Press Conference

When the CFS's first press AMFM release occurred last month, there was a recorded press conference.  It is online.

EH.net Book Review

A review of my new book, Getting It Wrong, just appeared on EH.net, maintained by the Economic History Association.

Wednesday, June 20, 2012

Press Release

Wall Street Journal press release.

It's the Money Supply, Stupid

Steve Hanke's July Globe Asia article is terrific.  The title is "It's the Money Supply, Stupid."  The same article appeared in the Energy Tribune.

Tuesday, June 19, 2012

Press Release

Press release about press conference in New York City tomorrow regarding the program I direct at the CFS.

Saturday, June 09, 2012

Wall Street Pit

There was an interesting post by David Beckworth on the blog, Wall Street Pit, today (June 9, 2012), using CFS Divisia M4 data.  The post also appeared in his own blog, Macro and Other Market Musings.

Tuesday, June 05, 2012

Bloomberg Best Business Books

More about Best Business Books on Bloomberg.

Monday, May 07, 2012

Best Business Books

There is more about the best business books from Bloomberg.

Wednesday, May 02, 2012

Bloomberg's Favorite Business Books

The following sentence starts the page for Bloomberg's favorite books list:
"Bank analyst Mike Mayo describes a dust-up with Jamie Dimon of JPMorgan Chase & Co., while a former Federal Reserve Board staffer dissects the central bank’s shoddy monetary data in two of our favorite business books of late."  The second book mentioned in that sentence is my book, Getting It Wrong.

Friday, April 27, 2012

Choice Magazine Review

A review of Getting It Wrong just appeared in the June 2012 issue of Choice magazine, used by librarians to choose books to add to their collections.

Wednesday, April 25, 2012

Radio Broadcast

On April 24, 2012, I was interviewed on the Kansas City radio program, Power Lunch.

Saturday, April 21, 2012

Article in Kansas City Star

This article, "Author to Fed:  Count Money Right," appeared on the front page of the Kansas City Star Business Section on April 21, 2012 (p. A14).

Wednesday, April 18, 2012

Kansas City Star

This announcement is to appear tomorrow in the Kansas City Star.

Sunday, April 01, 2012

Book Review of Getting It Wrong

A book review of Getting It Wrong appeared today in the Denver Post.

Wednesday, March 28, 2012

"The Accord" is Dead

If you think "The Accord" between the Fed and the Treasury is still in effect, read today's Wall Street Journal op ed by Larry Goodman, the President of the Center for Financial Stability in NY City.

Sunday, March 25, 2012

Best Business Books

Getting It Wrong listed as among the best business books by Business Week.

Book Signing Event at Ewards Campus of KU

Tuesday, March 13, 2012

Newmark's Door

An interesting post just appeared on the blog, Newmark's Door, about Getting It Wrong.

Saturday, March 10, 2012

Turkish Article

A article, "Enflasyon her zaman parasal bir olusumdur ama para nedir," about my Divisia M4 appeared in the Turkish magazine, Hürriyet Daily News, on March 7, 2012. I cannot read Turkish, so I do not know what it says.

Sunday, February 26, 2012

Globe Asia February 2012 Article

A very interesting article by Steve Hanke appeared in the February 2012 issue of Globe Asia. The article uses my Divisia M4 data.

Thursday, February 16, 2012

HistorySquared Post about Getting It Wrong

A post about my new book just appeared on the blog HistorySquared.

First Book Review of Getting It Wrong

The first book review of my new MIT Press book, Getting It Wrong, just appeared from Bloomberg News. The reviewer, Jim Pressley in Belgium, is not an economist; and some of the jargon is inaccurate, such as the statement about "money actually spent." At the end, he drifted off into the usual stuff about greed and irrationality. Unfortunately his review makes no mention of the Center for Financial Stability, my position there, or the highly relevant data provided there.

But on balance, the review is positive.

Thursday, January 26, 2012

Kindle Edition Best Seller

The book, Getting It Wrong, now is available from Amazon as a Kindle Edition, and already is on the Kindle bestsellers lists for both Econometrics and for Money and Monetary Policy.

Tuesday, January 10, 2012

Short Review of Getting It Wrong

A short one-paragraph commentary on the book, Getting It Wrong, just appeared in The Economist Intelligence Unit, which is associated with the Economist magazine.

Sunday, January 08, 2012

A Rant on The Money Illusion Blog

A January 6 rant on The Money Illusion blog referred to "Paul Spindt’s debit weighted money figures." But Paul Spindt's MQ index uses turnover rates (not debits) as prices (not weights). My Divisia monetary aggregates use opportunity costs (foregone interests) to measure prices of monetary assets.  Prices in index numbers are not weights.  Weights normally are expenditure shares, which depend upon all quantities and prices

I am not aware of a current source of MQ data, and they will not be computed or supplied by the CFS. But if you are interested in MQ, you can read about it on pp. 212-213 of my new book, Getting It Wrong.

Wednesday, January 04, 2012

Prices versus Share Weights

I just posted this on The Money Illusion blog. As you may have noticed in the latest issue of the Economist Magazine, The Money Illusion blog is highly respected.

Glad to see there is interest on this eminent blog about what I’m doing at the Center for Financial Stability (CFS) in NY City. That said, I probably should mention that interpretation of Divisia money is more difficult than it may seem. In index number theory, there are quantities, prices, and weights. With Divisia, the growth rate weights are the expenditure shares, which depend upon all quantities and prices, not just one price. The prices and the weights are not the same thing. With the Divisia monetary aggregates, the prices are foregone interest (opportunity costs). Those prices are not the same as the weights, but often are misinterpreted as weights.

Consider, for example, the case of a Cobb-Douglas aggregator function. The expenditure shares are constants for Cobb-Douglas. Regardless of what happens to the prices, the shares will not change. Hence the Divisia weights will not change.

What about other aggregator functions, not Cobb-Douglas? Suppose the price of a good goes up. Will its share (and thereby its Divisia weight) go up? That’s unpredictable, since it depends upon whether the own price elasticity of demand of the good is greater than or less than 1.0.

The CFS Reports section, which is not yet online, will try to help with accurate interpretation. My new book also does that in Appendix E. Once you get the hang of it, it all becomes clear. It’s all about the microeconomic aggregation theory that we all know from the CPI, the National Accounts, etc.

My Reply

Regarding the insightful commentaries that just appeared on the three blogs, The Money Illusion, The Market Monetarist, and Monetary Freedom, I just posted the following reply on the Monetary Freedom blog.

All very interesting. The relevant theory is in the appendixes to my new book, Getting It Wrong. The source of the new Divisia data is the program I now direct at the Center for Financial Stability in NY City. The program is called Advances in Monetary and Financial Measurement (AMFM).

AMFM will include a Reports section discussing monetary conditions. Although not yet online, that section will address many of the concerns rightfully appearing in the excellent blogs, The Money Illusion, The Market Monetarist, and Monetary Freedom. The distinction between the AMFM Reports section and the AMFM Library, which is already online, is that the AMFM Library only relates to articles published in peer-reviewed journals and books, while the AMFM Reports section will relate to the public media and online blogs.

There will be a press release when the full AMFM site is ready to go online.

Blog Posts About Getting It Wrong

Blog posts and discussion of my new book, Getting It Wrong, just appeared in three widely read economics blogs: The Money Illusion, The Market Monetarist, and Monetary Freedom.

Saturday, December 24, 2011

Marginal Revolution Recommendation

My book, Getting It Wrong, is on the Marginal Revolution blog's list of recommended books.

Saturday, November 26, 2011

Endorsements for Getting It Wrong

Endorsement quotations for the new book, Getting It Wrong, are online at the Center for Financial Stability.

Tuesday, November 22, 2011

Globe Asia Review, December 2011

A very interesting article by Steve Hanke appeared in the December issue of Globe Asia and highlighted recent behavior of Divisia M4.

Tuesday, November 08, 2011

Complete Front and Back Cover of New Book, Getting It Wrong

Here is the full front and back covers of the new book, Getting It Wrong, from MIT Press. Click on it to expand the view.

Front Cover, Getting It Wrong


Here is the front cover of the new book, Getting It Wrong, from MIT Press. Click on it to expand the view.