/lit/ - Literature

[Anonymous No.17284423]

I want to read the primary sources for the economic theory that the fed uses to justify its policy decisions. I'm under the impression that it's mostly Keynes, but some articles I've read say that his beliefs have been phased out.

I'm especially interested in support for the ideas that deflationary currency is bad and maximum employment is good.

On deflationary currency, the general argument I seem to hear is "if currency is deflationary, people won't invest or spend money, creating a contractionary economy. I would rebut that people will always need to spend money on food and deflationary currency helps to prevent wasting money (labor effort) on ditch-digging enterprise.

As for maximum employment, could it not be the case that an economy could sometimes reach its maximum production potential below 'maximum employment defined as it usually is as a function of sustainable gdp growth'? It seems like the somewhat arbitrary nature of these definitions, combined with using a 'grocery basket' to control inflation, may be creating a situation where we're keeping basics of sustenance cheap and inflating the shit out of everything worthwhile.

inb4 'how central banks enslaved the world'. gtfo with that.

[Anonymous No.17284466]

>>17284423
Irrelevant for 20 some years now. They create / delete 1s and 0s as they see fit, and the value is based purely on what they declare.

[Anonymous No.17284531]

>>17284466
Indeed. But due to the omnipotent nature of the US dollar in measuring economic activity, I wonder if Fed activity largely obscures 'real economic value'. I don't think simply multiplying PCE or CPI inflation numbers is enough to 'lift the fog' and see what's really going on.

I think a robust knowledge of how and why they make their choices will be more useful in determining where 'real value' is.

Essentially, I'd like to take a Warren Buffet-style value investing approach. However, I think the entire securities market (bonds and equities) is overpriced because accommodative fed policy is pushing investors to run to risk.

[Anonymous No.17284555]

>>17284423
I bought this book at a used book store, haven't read it though, it's a fucking thick beast.

[Anonymous No.17284578]

>>17284423
>I want to read the primary sources for the economic theory that the fed uses to justify its policy decisions.
Keep printing bills and loaning to the US government to make it your debt slave. That's literally their entire strategy.

[Anonymous No.17284584]

>>17284578
There must be some literature that they either refer to or produce as rationalization / justification of this strategy, though. So what is it

[Anonymous No.17284613]

>>17284584
I literally posted a book >>17284555
I even got trips.
This is a bait thread.
Fuck you OP.

[Anonymous No.17284950]

>>17284423
Keynesianism is not what we follow at all besides shallow implementations of the phillips curve and half measures like QE without actually admitting to the ideas which support them. The Fed is not a hegemon and because of various political interests and ideas in congress, their practice is done with mixed ideologies.
Most of what you see now is modern neo-lib economics, the result of reactionary McCarthyism in the 60’s which labeled Keynes a socialist and banned his books from schools. What was left was the inbred mess of the Austrian school which Keynes BTFO in his day, but was comfortable to American oligarchic capitalism so we adopted it and renamed it the Chicago school. Of course that’s an oversimplification but it’s close enough.
Honestly, read the textbooks. There are great options available online. Start with micro and macro, then get a good understanding of probs and stats. Then start reading the literature of the important economists themselves like wealth of nations, Keynes general theory. Solow’s growth theory, histories of the Breton woods conference etc etc for an understanding of the ideas and their historical context.

>deflation
I don’t think you get the full scope of what you’re talking about. If a currency is deflationary then investment doesn’t happen because the short term is worth more than the long term. This isn’t just with financial investment, it’s with the entirety of an economy. If you know your $100 is going to have the buying power of $90 in a week, you’re going to spend it on, at the very least, canned goods so you don’t starve. Large scale this becomes a movement away from the deflationary currency to more stable long term assets. As more people ditch the currency for gold or euros or what have you, the more supply you have, the less it is worth, the more it deflates. Classic deflationary spiral. This is what the U.K. treasury was in danger of during the outbreak of wwi. This was because they still pegged their currency in gold and people wanted gold for pounds as they weren’t sure the pound would be worth anything once blockades cut off trade. Of course there are modern states whose treasuries set deflationary interest rates, but those are in countries with a dearth of external investment and don’t operate as one of the reserve currencies of the world. They also might do this to keep their currency trading less than major trade partners in order to maintain a trade surplus. These countries (already wealthy) also keep their deflation around 1% per year so the real effects are minimal.
Other large scale effects are labor, in deflation real wages increase while nominally they stay the same, leading to an over expensive workforce and therefore layoffs or firms defaulting. Also mortgages or other long term investments become depressed, because why buy a house today for 100k when in a year it will be 90k?

[Anonymous No.17285000]

>>17284950
You can't inflate forever without value going to zero, sorry. Deflation is good.

[Anonymous No.17285056]

>>17284423
>maximum employment

This is a big problem with people getting into economics. Those things like maximum employment and gdp are numbers we made up. Sometimes centuries ago. Sure, we could totally reach maximum production under non max unemployment. It, like you said, just depends on how you define those words. Or how you define “sustainable” gdp growth. And does that take into account just market growth or the growth of physical and monetary capital? Etc etc etc. one of the main problems with neo-lib economics is that they got so caught up in the numbers they forgot it’s all bullshit. There is a widespread belief that the market will solve all inefficiencies but that is categorically false. Economics is the study of chaotic dynamics with semi rational actors. Sure, we have some equations that can sometimes predict and define things quite well, but at the end of the day, money is a technology and economics is not a black box. Economics works because we believe it works. Our models work because we believe certain things about money, not always because money has some intrinsic laws of motion. Economics is fascinating and important, but it must always be understood that it is a kind of narrative engineering project rather than a hard science.

[Anonymous No.17285131]

>>17285000
Trips and still stupid

Apparently we operate on timescales of “forever.” well, if productivity increases “forever” as it has been through all recorded history then eventually goods will also be worth essentially nothing. Congratulations. You proved money is worthless in a post scarcity economy. Now maybe try to make an argument about the long-run economics of inflation so I can at least pretend like you’ve read the literature.

[Anonymous No.17285178]

It's claimed to be MMT, modern monetary theory.

Central banks are Keynesian but they only go one way, mass printing.

[Anonymous No.17285198]

>>17285131
Productivity wont increase forever because there are not infinite resources. There is a scarcity of resources. There is no scarcity of money since it's just zeroes on a hard drive pegged to nothing. Try to keep up? Let me guess, you're also a seething nocoiner.

[Anonymous No.17285210]

Adam Smith “the wealth of nation”. One of the greatest books ever written.

[Anonymous No.17285211]

>>17285198
>he's a cryptocuck

[Anonymous No.17285217]

>>17284555
How old is it?

[Anonymous No.17285222]

>>17285211
I know, it pains you that my understanding of economics has led directly to me being a millionaire before age 30, while your love of inflation has led to nothing but seething effortposts.

[Anonymous No.17285276]

>>17285198
lol nice projecting
You were so close to getting it by realizing value is almost pointless but not quite! I’ll try to make it simple for you

If inflation continues forever, money will eventually be worthless.

Humans will, however, not exist forever

Therefore, any discussion based on an economic state humans will not see is irrelevant.

In between those states, where money is a real number, all a treasury need do is tack on a sufficient number of zeroes to feed the monetary narrative.

[Anonymous No.17285296]

>>17285222
>cryptoshit
>understanding of economics
It's ponzi scheme pump and dumps every single one of them. If you had any understanding of economics you would know they are all worthless like FIAT except they cost tremendous amount of energy, so actually they are negative value.

[Anonymous No.17285302]

>>17285276
The point of saying that inflation taken to infinity results in no value, is that it also says that the process of inflation is a process of reduction of value. In an approach to infinity, you never reach the asymptote—but you can still calculate its value. Do you even do math, retard? Maybe you should learn a little calculus before you spout off about numerical questions.

[Anonymous No.17285312]

>>17285296
Yeah, so you dont understand what scarcity is, and we can just ignore your opinion from here. Ciao.

[Anonymous No.17285743]

>>17284613
>>17284578
this guy:
>>17284584
wasn't OP, I am. So let me refer you to my OP post:
>>17284423
>inb4 'how central banks enslaved the world'. gtfo with that.
"secrets of the temple" sounds like some "it was the joos" shit. I don't care if they are/were or weren't jewish, I want primary sources for the economists whose ideas influence their policy, as I clearly stated in the OP. "how the federal reserve runs the country" does not fit that description. I don't want 'a book' I want a fucking primary source you nonce.

>>17284950
thank you for the effort. Please continue to participate in spite of trolls.

>Honestly, read the textbooks. There are great options available online. Start with micro and macro, then get a good understanding of probs and stats. Then start reading the literature of the important economists themselves like wealth of nations, Keynes general theory. Solow’s growth theory, histories of the Breton woods conference etc etc for an understanding of the ideas and their historical context.
I read the first half of wealth of nations, Keynes's general theory is in the mail. According to smith though, it looks a whole lot like what the fed is doing ought to be creating insane inflation.

I'll have to come back to your second paragraph because I'm not grasping all of it immediately and I gotta eat something, but the two things that jump out immediately to me:

>Also mortgages or other long term investments become depressed, because why buy a house today for 100k when in a year it will be 90k?
Because maybe you need a house.

>If you know your $100 is going to have the buying power of $90 in a week, you’re going to spend it on, at the very least, canned goods so you don’t starve.
If I'm trying not to starve, wouldn't I buy canned goods regardless of what the buying power of my $100 is?

side note:
I will mention that I own some crypto but am largely neutral on it. As far as it goes as an asset it looks a lot like gold that's easier to transact in under many circumstances, but it'll take 50 years to really suss out what it is. If all the major trading companies banned it, they could effectively kill it. I think the west would like to. However, China is a real wild card and I don't think they're going to ban it because it's potential development puts some pressure on the dollar. At some point I think they might also like to ban it for competing with their currencies, but for the time being it makes us nervous so they like it. I think it'll be a matter of who learns how to 'deal with it' more quickly. If one country bans it and others don't, it'll just hurt them (as smith described with countries banning foreign transactions in precious metals long ago).

[Anonymous No.17285782]

>>17285743
>>17284950
shit I didn't finish my thought, re:

>Honestly, read the textbooks. There are great options available online. Start with micro and macro, then get a good understanding of probs and stats. Then start reading the literature of the important economists themselves like wealth of nations, Keynes general theory. Solow’s growth theory, histories of the Breton woods conference etc etc for an understanding of the ideas and their historical context.
What I meant to say was that this is exactly the intention of the thread and I've started Smith, looking forward to Keynes, but am wondering who else exists between Keynes and now that I should put in the stack.

also, might you elaborate on how keynes BTFO the austrian school? and if we adopted the austrian school anyway, why the are we intervening with QE?

[Anonymous No.17286017]

>>17285782
>might you elaborate on how keynes BTFO the austrian school?
No, he cannot, since it didnt happen.