So Krugman has this post on dual equilibrium in default. He draws a couple of graphs and labels the post as (very wonkish).
He is a very successful writer so I assume he knows his audience. However, it seems to me that his basic point – that there are multiple equlibria associated with an expectation of default – is so blindingly obvious that I am not sure how you consider the question without coming up with that answer.
Now maybe that simply because I am in the process of winning back the title of most detached econ blogger. But, its just not clear to me. What else would someone think?
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Monday ~ August 8th, 2011 at 6:22 pm
Nick Rowe
But sometimes there’s only one equilibrium. So it can’t be that obvious.
Tuesday ~ August 9th, 2011 at 7:36 am
Khal Mojo (@KhalMojo)
1) Set up for future posts.
2) Not everyone is Mr. Smith, and don’t necessarily understand it all with nary a thought.
Monday ~ October 24th, 2011 at 9:50 am
You are neither dumb, nor stupid, Paul… – Kantoos Economics
[...] in this case. This argument is intuitive and under certain assumptions correct. Karl Smith actually applied for the title of „most detached econblogger“ because he found it to be too obvious to write much about [...]