Tom Holden
@t_holden
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Researcher, macroeconomist, Bundesbank. All views are my own personal opinions and do not reflect the opinion of the Bundesbank, the Eurosystem, or its staff.
Frankfurt am Main, Germany
Joined June 2009
I'm not going to be cool about this. This is a huge deal for me. I still can't believe it's real. I've somehow rolled this Trojan horse of a paper past the gates of the Top 5. Under its nerdy exterior hides answers to some of the most fundamental question of monetary econ. 1/
With a standard monetary rule & heterogeneous households, beliefs of a coming recession can become self-fulfilling. Monetary rules responding 1 for 1 to the real rate observed in TIPS markets prevent this & give near perfect control of inflation. @t_holden
https://t.co/GdAHQ1YJOx
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Musk's total labour supply is probably pretty inelastic. But Musk's labour supply to Tesla is clearly pretty elastic. He has several other companies to manage (X, xAI, Space, Neuralink, Boring Co) and he no doubt has ideas for others. Tesla shareholders can influence how he
Dear Luis: A follow up. By "should" i referred to the standard EC101 conclusion that people should be paid their marginal product. And I was implicitly arguing that labor supply at some point becomes inelastic, in this case closer to 100 billion or less rather 1000 billion.
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This is being damaged by the rise of live streaming. Before Covid, one of the biggest benefits of attending the NBER SI was seeing what the top of the profession really thought. Live streaming was supposed to bring this benefit to everyone. Instead, people now seem scared to
Another great thing about econ seminars is that it's where you can observe how people actually think about and evaluate research — it's the hidden curriculum revealed. If you only read the published and working papers, it is very hard to learn how researchers actually think.
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Obviously people shouldn't do this ⬇️, but I do understand why they do. If papers are refereed by people from the same sub-field, the referees have no incentive to point out field-wide issues. Think, for example, about applied finance papers with time fixed effects but which
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AND IT IS OUT! We have had enough reports saying Europe is stagnating. Change is not possible if we do not change the way the EU works. With Bengt Holmstrom and @competitionprof , I argue the EU should focus on prosperity and stop regulating everything. https://t.co/iZnCssIiP7
constitutionofinnovation.eu
An academic paper examining Europe's innovation challenges and proposing a constitutional framework for economic renaissance.
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That mainstream commentators like Robin are saying this is significant. I'm not sure I'm quite on team "end the euro" yet, but significant reform is certainly needed. For example, to me it seems: * The TPI was a mistake. * Not having a clear procedure for Euro exit set in
The Euro is like a bad marriage. Many think it should end, but divorce is scary, especially when one side keeps threatening the apocalypse. The truth is that Europe would be stronger without the Euro and better able to confront myriad external threats... https://t.co/ytcaAzhqX6
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This (I claim) is how we should present the NK model to students and policy makers. Not with three equations, but with two. An aggregate supply relationship, the NKPC, and an aggregate demand relationship, the monetary reaction function. Effectively, the central bank directly
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"HANK is closer to reality. You need a reason to move away from it. For Debortoli and Gali, that reason is tractability – but if modern methods make richer heterogeneity tractable, then you should simply use that." I disagree. There is value to sticking with simple models where
Today! on the blog: what have we learned from inequality in macroeconomics?
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My kids joined a bilingual kindergarten this year, which has a few American families. As a result, the parents do Halloween properly, organising a load of Halloween stops around my neighbourhood. It's the first time I've really felt a sense of local community since moving to
America actually only has three “community” holidays: Halloween (trick or treating) July 4 (parades and fireworks) Christmas (caroling— but that’s dying) All other holidays are essentially private affairs. Which is sad because community holidays rock.
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There's been a lot of confusion on this platform of late on what household heterogeneity buys you in the HANK model. In a model without capital, HA has no implications for aggregate quantities that are common across monetary rules. If HA gives you amplification under one rule, it
OK guys, come on. Maybe 10-20% of economists understand the NK model. Few people actually seem to use it (modern HA models that market themselves as NK have qualitatively different forces, sources of "stickiness"). The assumptions make no sense, the results are questionable
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Two of my favourite personal attacks following my recent moderately viral tweet. People who are regularly successful on this platform must be drowning in vitriol.
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America has much higher average income than Europe, and the bottom 10% are no worse off, and that is somehow a failure of the US?
It's a remarkable fact that the bottom 10% in France and UK have about the same income (slightly higher) as their American counterparts - in spite of the fact that America has much higher GDP per capita. That's a testament to our policy choices, including the failure to raise the
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I was open to the possibility that ABMs might have something to teach mainstream macro, so together with other UoSurrey economists and sociologists, I joined a project on "bridging the gap" between ABMs and HANK models. Unfortunately, every meeting we had with the senior
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I was pleasantly surprised by how research active Hassett has been over his career. A reasonable economics background (even if not monetary econ) certainly helps in the job, and it suggests that the Fed staff may be able to persuade him to stick close to Fed orthodoxy. We'll see!
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Kevin Hassett is now leading the race to be the next Fed chair in prediction markets. Amusingly, his last publication (per RePEc) studies biases in such markets. It suggests that markets are actually understating his chances to win.
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And if this rule were suitably locked (in a constitution say), then the political economy would be improved. There would be no ambiguity about the direct costs of increasing pensions. And with greater personal saving people would take more responsibility for their own retirement.
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The saving of the old is returned to the young(ish) through bequests, so the more the old save, the closer you are to the private pension allocation (apart from the labour supply disincentive). (My assumption is that the capital stock is too low in much of Europe. Am I wrong?)
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If you must have a PAYG pension system, cap total payouts each month at total payments in to the scheme the previous month. Then at least it's not future generations that are paying current pensions. By increasing pension risk, it also encourages all generations to save more.
Pay as you go pensions were a mistake.
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Pay as you go pensions were a mistake.
Young people are especially oblivious 34% of 18-24 think that their contributions will fund their future pension... when it goes straight to current pensioners
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High demand volatility helps rationing bite. Salaried contracts = lab supply rationing, for jobs with high mean lab demand. A future version of my rationing paper will likely calibrate lab demand shocks to this data, with rationing in lab supply as well as in product markets.
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