Do We Fear Inflation or Hope for It?

Mariano Torras Finance, Future, General, Macroeconomics, Politics Leave a Comment

February 28, 2021

Fear of inflation again appears to be rising to a fever pitch. Yet confusion about it persists, both among the uninitiated and the cognoscenti. It calls for a quick review of the basics. My students invariably state that inflation means the value of their money is going down. But of course, it is not what it means. Erosion of monetary value is a mere consequence. They will also sometimes claim that they can no longer afford Knicks tickets due to …

Path Dependence and the Folly of Incrementalism

Mariano Torras Complexity, Economic Theory, Environment/Sustainability, Future, General, History, Politics, Public policy/Wellbeing, Reflections, Science 2 Comments

“History matters” (Robert Jensen) I am currently teaching a seminar entitled “Rethinking Progress.” One recurring topic in our discussions is the modern world’s present rate of technological advance in the absence of commensurate progress in the social sphere. My students sense an ominous imbalance and probable environmental overshoot. I want them to see the folly of incrementalism as a solution, yet do not want them to see me as preaching revolution. I therefore believe an understanding of path dependence to …

The Inevitability of a (Probably Massive) Green New Deal

Mariano Torras Ecological Economics, Environment/Sustainability, Future, General, Macroeconomics, Politics, Public policy/Wellbeing, Science Leave a Comment

February 21, 2021

Did I get your attention? Ok, let me preface by adding “at some point” to the title. After all, to say that the present political climate in Washington makes a Green New Deal impossible might even be an understatement. And there really is nothing inevitable about such a policy breakthrough. One could alternatively imagine an endless political war of attrition. Yet most thinking people are coming to realize, however slowly, that continuing to ignore the global environmental crisis spells ruin …

Is Progress “Progressive?”

Mariano Torras Complexity, Environment/Sustainability, Future, General, Politics, Public policy/Wellbeing, Science Leave a Comment

February 6, 2021

It is not only because I am presently running a seminar on progress that I write about it here, although it has inspired me. Economic progress is a subject that has interested me for my entire career, and much of my research and writing is devoted to it. But progress is an idea that goes far beyond economics. It is, for example, related to politics, which is from where we hear the term “progressive.” But is progress progressive? What does progress even …

Remember Climate Change?

Mariano Torras Complexity, Environment/Sustainability, Future, General, Politics, Public policy/Wellbeing, Reflections, Science Leave a Comment

January 31, 2021

“I’ve starred in a lot of science fiction movies and, let me tell you something, climate change is not science fiction. This is a battle in the real world, it is impacting us right now.” (Arnold Schwarzenegger) The current pandemic has made us mostly, at least temporarily, forget climate change. Climate change will be with us for a long time to come, so keeping it newsworthy was challenging even before Covid-19 hit us. But it is important not to forget about it. …

True Artificial Intelligence Has Arrived

Mariano Torras Complexity, Future, General, Science Leave a Comment

January 16, 2021

Artificial intelligence (AI) is not my area of expertise, but I suppose that being a generalist gives me license to comment on it. And anyway, the implications of AI could be far reaching for economics – and humanity in general, of course. In a liberating or in a very scary way, depending on which path we follow with it. But that’s for another time. Today I want to focus on the technology itself. Progress that we have made with chess …

More Musings on Generalism

Mariano Torras Complexity, Future, General, History, Methodology/Statistics, Science 1 Comment

January 10, 2021

I recently read Yuval Noah Harari’s Sapiens: A Brief History of Humankind. It’s a bit late for a formal review since the book is over five years old. But in case you haven’t read it, the book is fascinating. Harari manages to convey so much historical information in an extraordinarily clear and concise manner. Despite its far-reaching scope, Harari manages to come across as profound and radical. I do not mean radical in the “leftist” or “extreme” sense, rather in …

Paradox of Thrift No Longer

Mariano Torras Economic Theory, Finance, Future, General, Macroeconomics, Politics, Public policy/Wellbeing Leave a Comment

January 7, 2021

I want to try to bring together a few points about which I’ve posted previously. My motivation is to address an important article last week in the New York Times (January 1st) by Neil Irwin and Weiyi Cai. Perhaps its early for such a declaration, but the phenomenon they reveal might require a rethinking of Keynes’s celebrated “paradox of thrift.” The authors point out that much of the recent stock market boom can be attributed to an inordinate increase in …

Exchange Rates and the Dollar: The Short and Long View

Mariano Torras Finance, Future, General, International/Development, Macroeconomics Leave a Comment

December 23, 2020

Last week the U.S. Treasury Department took the unusual step of labeling both Switzerland and Viet Nam currency manipulators. If the accusation stands, the two countries will then need to come to an agreement with the U.S. and the IMF or face possible retaliatory tariffs. The mainstream press has, as always, focused on reasons for, as well as the possible consequences of, the artificial currency deflation by the two countries. And as someone asked by many a puzzled student why …

Technological Complexity: The Next Black Swan?

Mariano Torras Complexity, Future, General, History, Microeconomics 1 Comment

December 14, 2020

A comment in Friday’s Financial Times by John Thornhill caught my eye, although not for the reason you might think. His piece was mostly a warning about how our overreliance on technology could spark the next global crisis. The article elaborated on a number of cyberwar and cybersecurity risks that make our modern society increasingly vulnerable to any number of attacks. And sure enough – would you believe it! – just two days later it appears that some Russians successfully …