Mathias Jimenez

A price is a quantity a buyer sells.

@JesusFerna7026 @ChrisPhelanEcon Maybe a little off topic, but it seems firms could offer this inter-generational contract, given State contract enforcement. Why don't we see this?

This is a great point, and I want to take it seriously because I think we are closer to agreeing than it seems. You are absolutely right that I cannot insure against my birth year: that is fixed. But sequencing risk does not require uncertainty about your birth date. It requires uncertainty about future returns, and that uncertainty is very much alive for every actual living person right now. A 55-year-old today does not know whether the next 13 years will look like 1987–2000 or 1996–2009. That is genuine, ex-ante risk. Portfolio selection can mitigate it (that was the whole point of my glide path discussion), but as I tried to show, it cannot eliminate it without giving up a lot of expected return. Your fire insurance analogy is the right framework, but I think it cuts the other way. Nobody is proposing to set up the pool after we know whose house burned. A well-designed Social Security system is established before anyone knows which cohorts will be lucky and which will not. That is insurance, not redistribution. It only looks like ex post redistribution after we observe who got the good draws and who got the bad ones. Where I think we disagree is your last point: that portfolio selection can achieve the same thing. I would argue that is precisely what my exercise showed is not the case. The 1963 cohort could not have portfolio-selected their way out of retiring into 2008–09. The glide path helped. It did not solve the problem. And the reason is structural: a single investor cannot transfer risk to cohorts who have not yet been born. That is what intergenerational risk-sharing can do that no individual strategy can replicate. You and I can diversify across assets. We cannot diversify across time. Only an institution that spans generations can do that. But you are right that this is a different argument from Rawlsian redistribution, and I should have been clearer about the distinction. Insurance and redistribution look identical in the accounting. The difference is whether the arrangement was set up behind the veil or in front of it.

The year one is born is not a risk. It is who you are. Quoting my favorite economist, "Michael Jordan and I were born on exactly the same day, month and year. Yet he was born with otherworldly athletic talent (along with a huge mental drive to develop that innate talent), while I was born with, well, less talent and drive. As a result of these differences at birth, he is immensely wealthy while I am … less so." "Michael Jordan doesn’t worry about being born talentless. He already knows he was born with his skills and not mine." We shouldn't confuse redistribution with insurance. minneapolisfed.org/article/2016/i…

@JSwamptooth @MaMoMVPY +1

@MaMoMVPY Do you have a version of this to show upward and downward revisions instead of absolute?

Trump has fired the chief of the Bureau of Labor Statistics, Erika McEntarfer. Trump's justification was that there were too large and, in his opinion, politically motivated revisions to the American employment figures ("Nonfarm payrolls"). I've taken a look at the historical revisions of the labor market figures. It should be noted that one of the reasons for these revisions is that when the first employment estimate is released, it's based on a smaller data foundation than when the final figure comes out. As more responses come in, the estimate becomes more accurate, but this also leads to revisions. It's essentially a survey of American businesses. BLS simply asks businesses how many employees they have in a given month, and based on this, BLS produces an estimate for total employment in the US. Total employment in the US is around 163 million people. Historically (since 1979), monthly revisions have averaged 57,000 people (in either direction). Out of 163 million, this is practically nothing - about 0.03%. There's also nothing to indicate that this has gotten worse over time - if anything, the opposite. Over the past 5 years, the average data revision has been 55,000 people per month. That's marginally less. And this despite the fact that in 2020 - during COVID - there were very large revisions in certain months. That said, revisions have been increasing again over the past 1-2 years, and it appears that simply fewer businesses are responding to BLS's survey than before - and it's taking longer to get responses in. But to say that the numbers are particularly biased is simply not correct. What one might consider is whether it's even meaningful to make so much of the variations seen from month to month. Is it even meaningful whether employment rises by 50,000 or 200,000 in a given month? Relative to employment of over 160 million people, that difference is minimal. If BLS, instead of publishing a figure showing the NUMBER OF PEOPLE CHANGE in employment, had published the percentage change in employment, there would be almost no story to tell.

@aetchebarne Vivo a dos cuadras! Que haces por acá?

Tarde de Central Park

@constant_hevia Pero en general un cripto activo puede tener valor positivo sin cash flows si provee algún servicio y se diferencia. La diferenciación puede ser ser el primero con un protocolo cuya utilidad depende de la escala de uso (e.g. Bitcoin) 2/2

@constant_hevia Yo lo pensaría como un coleccionable digital. Aunque el costo de entrada es 0 podés diferenciarte (e.g. promocionado por alguien "influyente"). 1/2

Me dicen que un token brinda un servicio como mandar plata de un lado a otro sin que se meta el gob y que eso justifica precios positivos. Disiento. El costo de entrada de crear tokens es cero. Competencia llevaría el precio a 0. En cuyo caso, precio positivo solo sería burbuja.

@vivassantanaj_ @Prosperahn @ciudadmorazan1 Creo que en Uruguay estamos lejísimos de la autonomía que tienen las ZEDES. Ojalá estuviésemos más cerca.

En Uruguay el gobierno ha alcanzado todos los acuerdos que permitan a las Zede desarrollarse y generar miles de empleos con expansión empresarial y tecnológica, en equilibrio ambiental. Zonamérica es un ejemplo. En Honduras están @Prosperahn, @ciudadmorazan1 y Orquídea

@GeorgeSelgin 1F, 2F, 3F, 4F, 5F, 6F, 7F, 8F, 9F, 10F, 11F, 12F, 13F, 14F

That's it! I'll post correct answers and a scorecard next week.

(10) "Nations that established central banks and eventually granted them the exclusive right to issue paper currency generally did so only after their commercial-bank based currency systems turned out to be costly failures."

@constant_hevia @utditella El mejor profe de mate que tuve. Abrazo a la gente UTDT.

Muy triste por el fallecimiento de Pablo Azcue. Gran profesor y mejor persona. Todos lo vamos a extrañar en @utditella. Abrazo fuerte a su familia.

Zero-sum thinking is a key mindset that shapes how we view the world. Excited to share a new paper on the roots and consequences of Zero-sum thinking with @sahilchinoy, @DrNathanNunn @SMGSequeira. A summary thread🧵1/23 scholar.harvard.edu/files/stantche…

Today is a sad day for economics. Robert E. Lucas, Jr., a great researcher and teacher died this morning.

@Tpsmyth01 @jp_koning @DanEricRohde @rch371 Woow I thought 1994 reform made possible new branches

@jp_koning @DanEricRohde @rch371 Dodd Frank eliminated the last of the old interstate branching restrictions so now a bank like JPM can open a "new" branch anywhere in the US they want something that wasn't possible pre DF(pre DF interstate mergers were fully permitted but no de novo branches)

I made this chart to show how diffuse the U.S. banking system is compared to the Canadian one. The assets of the top-6 🇺🇸 banks represent a much smaller proportion of total banking assets than the top-6 🇨🇦 banks.

@gregsasso @ShengwuLi Like using the same equation twice..🫠

That moment when two complicated terms in a long derivation happen, against all odds, to cancel out.

@DanEricRohde Agree!

More and more, I think the single greatest strength of Canadian banking law is that the Bank Act expires every 5 years (formerly 10). It's too easy to ignore banking law except in a crisis. This forces it to become a live political issue regularly. You can't ignore it!

@dandolfa Macro reasoning sometimes feels like never ending opening of Pandora boxes 🫠

@mathiasjimenez0 Whether used to purchase goods, services (and what type, e.g., military, school lunches, health care, infrastructure) or used to make transfers (and location of transfers, etc.).

Let's think about it another way. The "national debt" (stock of outstanding USTs) is held either inside or outside the Fed. Assume the the national debt is fixed at some level.

@dandolfa What do you mean by the nature of govt spending?

Ah, but won't the fiscal authority simply be encouraged to increase the nominal debt? Yes, possibly (perhaps even likely). The inflationary consequences of this would depend on the nature of the implied government spending.

Is full transparency always the best policy? Surprisingly, the answer can be a "no" in some circumstances. On the economics of opacity. 🧵

@antinertia @Ant0ine_Gt What do you take for stress?

@Ant0ine_Gt Supplements for inflammation, stress and energy

Everyday is the same day 💊🍗🥹

@jp_koning There are a couple of econ history papers by Michael Bordo et al I think showing the same for first half of 20th century.

I've always thought that it was better to be a customer of a U.S. bank than a Canadian bank, because U.S. banks are competitive while Canada's "Big 5" are an oligopoly. In this post I'm forced to revise my views: jpkoning.blogspot.com/2022/12/are-us…

@licandro1 Ahh perfecto. Se financian con futuras ganancias contables del BCU entonces.

@mathiasjimenez0 Con la emisión de Bonos del Gobierno. Hasta la actualidad, esos bonos son "a medida" del BCU y no se pueden vender en los mercados.

Efectivamente. El déficit operativo y de caja varía poco año a año. Pero al tener el BCU una posición comprada superior a los 7000M USD, tiene ganancias contables cuando el dólar sube (como entre 2018 y 2021) o pérdidas cuando cae (como en 2022). sigo:

@licandro1 Pero cómo se financia la capitalización?

@mathiasjimenez0 no afecta la deuda neta consolidada porque el pasivo del gobierno es el activo del BCU y cuando se consolidan se netean.