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by sjehay 2943 days ago
I zoned out at Section II ("The Central Banking Narrative Has Collapsed") because every single paper he cites is written by him (and in fact so are 18 of the 20 publications he cites in the entire article)
5 comments

Weirdly, some of the organizations and theories he's attacking are also his own (he was the lead author on the [weak] Positive Money paper which proposed making the Bank of England directly control the money supply he's now insinuating is some central banker astroturfing campaign, and the unconventional recommendation central banks broaden their remit to tackle Japanese economic stagnation by taking on some of the asset purchase and lending roles of the commercial banking sector which he now appears to consider to be a road to "Orwellian totalitarianism" is literally how he made his name)
Hey, if it were actually an astroturf campaign, who would be in a better position to know than one of the principals?
Extraordinary claims require slightly better evidence than someone darkly hinting that one of the organizations whose policy objectives he helped shape "appears well funded in the country of its founding (the UK), and it seems suggestive that its members have appeared at national and international events and conferences together – and apparently singing from the same hymn sheet – with the Bank of England and the George Soros (Gyorgy Schwartz)-funded INET (‘Institute for New Economic Thinking’)" whilst failing to acknowledge he was its most reputable contributor and disavowing the policies he's advocated in various capacities for quarter of a century before that only implicitly (whilst continuing to cite other parts of the papers anyway).

Feels like the whole argument is going on inside his own head, and whilst I've heard economists conclude policies they used to advocate wouldn't work before, I've never seen them handwave their earlier beliefs away as "totalitarian" without even acknowledging they actually used to hold them.

I intended the comment as tongue-in-cheek.
Weirdly, you haven't addressed the ideas expressed in the article in any substantive way.
Yeah, his citations are mostly his own papers, seems like a giant red flag.
Not his first rodeo either, see his talk page at Wikipedia: https://en.wikipedia.org/wiki/User_talk:Rawjapan
I also noticed that, and it raises concerns. However, the intro, the questioning of the fundamentals when faced with evidence that contradicts the assumptions, is long overdue.

When interest rates entered negative territory, something deemed formally impossible a decade earlier, a huge alarm should have sounded in Economics. Instead, we got some after-the-fact explanations that are untestable, and continue applying the same old models.

Science is about constant questioning of assumptions, and I have the feeling Economics fails at this crucial step.

Currency reminds me a lot of religion. It requires an absolute faith by devout believers in its value which is entirely based upon human interaction.
No economist believed that negative interest rates were formally (or informally for that matter) impossible. You might find arguments that real rates (nominal rate minus inflation) should never be negative, but in a deflationary environment nominal rates can go below zero without violating that.
Yes, of course, in a deflationary environment, rates can be negative. We are in an inflationary environment, though. Zero was thought to be a hard limit -- in terms of interest rate efficacy as a lever to act on the economy.

Now, the mantra is that near zero negatives are still within the efficacy envelope. It was not predicted, but stated after the fact. This is, to me, a clear sign that the model is wrong, and should be reviewed with no barriers to questioning basic assumptions.

> because every single paper he cites is written by him

The bulk of the article is an elaborate straw man followed by cherry picked statistics.

I suspect most researchers fear that mining this particular vein would be career suicide. Prof Werner seems likely, based on his bio, to have made a lot of money in the financial industry - he can probably afford not to give a damn.