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r<g is an essay on the question whether r<g means the government can borrow and not worry about repaying debts. No.  Abstract: A situation that the rate of return on government bonds r is less than the economy's growth rate g seems to promise that borrowing has no fiscal cost. r<g is irrelevant for the current US fiscal problems. r<g cannot begin to finance current and projected deficits. r<g does not resolve exponentially growing debt. r<g can finance small deficits, but large deficits still need to be repaid by subsequent surpluses. The appearance of explosive present values comes by using perfect-certainty discount formulas with returns drawn from an uncertain world. Present values can be well behaved despite r<g. The r<g opportunity is like the classic strategy of writing put options, which fails in the most painful state of the world. The essay is based on comments I gave at the spring NBER EFG meeting on Ricardo Reis' "The con...

The Fiscal Theory of the Price Level  is a book I'm writing on that topic. It now has a full draft, here .  Comments, typos, suggestions, complaints, parts you find too easy, part you find too hard, things you think are wrong, parts you find repetitive, parts you find need better connection, things I should add, things I should delete are all most welcome!  I also did a 2 hour video mini-course on FTPL for the Becker-Friedman Institute last summer, with slides/notes here.   Update: The video link is now fixed (2/1/2012)

About a month ago, Russ Roberts and I had a great conversation about virus, vaccine, and tests for the Econ Talk podcast, and the free market approach. It's out now, here for the podcast,  or embedded below  and here video on YouTube . The podcast link already has some excellent comments. 

Why are people gloating over Rush Limbaugh’s death?  Charles Lipson writes   The gloating over Rush Limbaugh’s death ought to shock the conscience. That’s not a political statement. That’s a cri de coeur about how our basic sense of human decency has been warped by political differences. To take one example, a Yale Law professor tweeted he wasn’t just happy Limbaugh had died, he was euphoric. He’s not some drunk being carried out of a rowdy bar. He’s the Charles F. Southmayd Professor of Law and Philosophy at Yale Law School and the Director of Yale’s Center for Law and Philosophy. ... The New York Times chose to write about Limbaugh's "Legacy of Venom:", "Weaponizing conspiracy theories and bigotry."  Could they not wait for his body to be cold? Or show less respect for the tens of millions of apparently deplorable fellow citizens who listened to him?  This is not one more complaint about the woke left. This is a problem on both sides.  Rush’s friends on the r...

Arnold Kling has an intriguing series of blog posts  on the nature of universities and other institutions that are, as he says, cancel-bait. I removed the cancel-bait part and pass on his observation on the shift in institutional culture, visible in universities but also in corporate and nonprofit institutions and in our politics.  1. The older culture saw differential rewards as just when based on performance. The newer culture sees differential rewards as unjust. 2. The older culture sought people who demonstrate the most competence. The newer culture seeks to nurture those who are at a disadvantage. 3. The older culture admires those who seek to stand out. The newer culture disdains such people. 4. The older culture uses proportional punishment that is predictable based on known rules. The newer culture suddenly turns against a target and permanently banishes the alleged violator, based on the latest moral fashions. 5. The older culture valued open debate. The newer culture...