I mean macroeconomic things, not just cars and canoeing and stuff.
This is another "selection bias in blogging" post. Probably a more important selection bias than the one I talked about in my previous post.
If you thought that my blog posts are about all the things in macroeconomics I think are important, you would be wrong. Yes, my thinking something is important is one criterion, but it's not the only one. There is no point in me blogging about something I think is important if I also think I don't have anything useful to say about it. Because other people know more than me. Because other people are already saying anything I could say. Because I don't have any new thoughts I haven't already said. Because I can't make up my mind on the subject so don't know what to think. Etc.
It should be obvious really, but perhaps it isn't.
There's an old joke, often directed at economists, about the guy whose only tool is a hammer, and so sees everything as a nail.
It's a stupid joke. Most of us do only have one tool, or a limited selection of tools. There is no way any one individual can master all the tools that all individuals together can master. There's something called "the division of labour", and "economies of scale", and the reason we aren't all still living in caves is because of that.
So we hammer the things we think are nails. We even hammer some things we think might be nails, because you can't always tell by looking whether it is a nail, so you hammer it and see if your hammer works. And we ignore the things we are pretty sure aren't nails, even if we think they need something doing to them, because we can't do whatever it is that needs doing.
Here's a partial list:
1. The Eurozone. It's not getting better. It could get much worse. I think it will get much worse. I don't see any way out that isn't bad. And probably bad for countries outside the Eurozone too. But I don't have anything to say on the subject I haven't already said. And a lot of other people are saying the same things as I would say anyway.
2. The Canadian housing market. I have been worrying about the anecdotal evidence I read about people buying houses based on overoptimistic predictions of future house prices. And symptoms of herd-like behaviour where people join a queue to buy condos because the queue is already so long the condos must be a good deal. And buying with too small a downpayment. And recent signs it might all be coming to a head. FWIW, I probably wouldn't buy a house now if I didn't already own one. And I would already have sold the one I own if it weren't just too much of a hassle to move. I used to blog about this stuff a couple of years back, but then I stopped, because I realised other people knew a lot more than me, and I didn't have the time or comparative advantage in getting the knowledge I needed. Plus, the government and Bank of Canada have been talking about this, and taking action, though I don't know whether those actions are enough or timely enough.
3. The national debt in countries like Japan. When nominal interest rates are below the nominal growth rate of the economy, national debt is not only not a worry; it's a good thing. It's a sustainable Ponzi scheme, and the solution to a problem of dynamic inefficiency. Sure it's a bubble, but economies where the interest rate is below the growth rate need a bubble. The trouble is, what happens if and when the interest rate rises above the growth rate, and we re-enter the normal world where the long run government budget constraint is well-defined, if the debt/GDP ratio is very large?
(Hmmm. Maybe I should do a post about that, because maybe this is something I think I know more about than most people, and isn't being talked about much.)
4. Other stuff I can't remember right now.
"What were you blogging about when the Great Euro Crisis/Canadian house price crash/Japanese debt crisis hit, Daddy?"
"Ummm, strategy space and monetary policy. It's sort of relevant, in a way".