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PAICE: My unexpected journey from Finance to AI
Over the past year, I have increasingly dedicated my time to speaking, writing, and advising on the use of data, analytics, and artificial intelligence (AI). This includes workshops, lectures, and...
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The Effectiveness of Real Rate Rules: An Analysis Using 10-Year Yields and...
Abstract This blog post examines the effectiveness of real rate rules in stabilizing inflation expectations using quarterly data from 10-year Treasury yields and inflation data from 1988 to 2024. We...
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Fed’s hidden strategy: Implementing new dual NGDP targets
Traditionally, central banks have focused on inflation targeting, but NGDP level targeting provides a more comprehensive picture by encompassing both inflation and real GDP growth over time. However,...
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The Yield Curve as a Policy Instrument: Decoding the Fed’s Implicit NGDP...
Yesterday, in my post “Fed’s hidden strategy: Implementing new dual NGDP targets”, I introduced a weekly NGDP growth proxy for the United States and proposed a medium-term NGDP target rule. Today, I...
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A Summer Surprise: A rather massive positive supply shock?
Here are two sets of high-frequency US economic data: first, the daily US “inflation” numbers as measured by Truflation.com and the Weekly Economic Index (Lewis-Mertens-Stock), which is a very good...
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How Well Do Large Language Models Reason About Macroeconomics?
I think it is pretty clear to everybody who follows this blog and follows me on social media that I am deeply fascinated by AI and how we can use, for example, Large Language Models in economic...
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Eeny, Meeny, Miny, Mankiw: The Surprisingly Accurate Way to Guess Fed Policy
The Taylor rule is the celebrity of monetary policy rules, frequently touted as the go-to framework for central banks, especially the Federal Reserve. Its simplicity is its charm: set interest rates...
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Powell’s Reading List: Sahm’s Rule, Mankiw’s Guesses, and Dornbusch’s Echo...
On Friday we got the U.S. labour market report for July. Employment growth and wage growth continue to decelerate, and most notably, the unemployment rate rose to 4.3% in July, up from 4.1% in June....
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4m-RUIN: The most simple recession indicator in the world
On Friday, the headlines were flashing: “Sahm rule triggered”. The reason was that with the US unemployment numbers for July coming out at 4.3%, the 3-month moving average was now 0.5 percentage...
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Between a Rock and a Yuan: China’s Tough Choice on Currency and Deflation
The graph below in different variations have been making its rounds on social media in recent days. It is somewhat odd that it took so long for the number to get the any attention as the numbers this...
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Eastern Giants Stumble: China and Russia Face ’90s-Style Economic Reckoning
China and Russia Face Mounting Pressures as US Economy Remains Resilient Historical Parallels and Potential Consequences Yesterday we got the US ISM numbers, which surprised somewhat on the downside,...
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AI Agents in Minecraft: Vernon Smith-Style Experimental Economics on Steroids
From Vernon Smith to AI Agents: A Quantum Leap in Experimental Economics These days I spend most of my time talking and advising on the use of AI. I do this in my consultancy Paice that I have...
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Listen Up: NotebookLM Converts Minecraft AI Economics Post to Podcast
I have asked NotebookLM to create a podcast on my blog post “AI Agents in Minecraft: Vernon Smith-Style Experimental Economics on Steroids“. I think it’s pretty good – have a listen here: If you want...
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Agent-Based Experimental Economics: A New Era for Understanding Market Dynamics
AI-Powered Synthesis of Austrian and Chicago ideas Like many free-market economists, I began my early studies deeply influenced by the Austrian School, but over time I shifted toward the Chicago...
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1980s Danish Fiscal Wisdom: Expansionary Contraction as a Model for US...
On Twitter/X, Bob Elliott has been sharing his observations about American consumer behavior. Elliott, a seasoned investor and businessman, points out a paradoxical economic scenario: despite low...
View ArticleChina’s Lost Decade: Communist Ideology Meets Japan’s Economic Fate
China’s strategy of increasing debt issuance to stimulate the economy mirrors Japan’s reliance on public spending and debt during its “Lost Decade.” In response to a faltering economy, the Japanese...
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Xodus Explained: Machine Learning, Social Dynamics, and the Rise of Bluesky
Social Networks in Flux – The Shift from X to Bluesky In recent days, we have witnessed a remarkable migration of users from X (formerly known as Twitter) to Bluesky. This trend is not merely a...
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When Growth Slows, Tensions Rise – Inside China’s Dangerous Pivot
The Decade-Long Warning Signs For more than a decade, I have consistently argued that China’s economic model is fundamentally unsustainable. This perspective, which I first articulated publicly in my...
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‘Do Away With Money and You’ll Do Away With Inflation’– The Indy Cabbie,...
I had an interesting exchange on Bluesky yesterday sparked by Scott Bessent’s recent comments on tariffs and inflation. It started with Leslie Ehrlich sharing a story about a cab driver in...
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Putin’s Butter Crisis Intensifies as Ruble Slides
Today, the Russian ruble has weakened significantly – 7-8% against the euro and dollar. This is quite substantial – even for an Emerging Markets currency. I am generally very sceptical about shouting...
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