About

I’m an economics PhD student at MIT. Though I spend most of my time offline, in the academic world, I haven’t been able to shake the blogging bug completely. Occasionally I try to step in and offer my take on whatever debate is raging online. (My rationale, admittedly, doesn’t extend much beyond this.)

If you want to learn more about my background, an extremely out-of-date CV is here.

13 responses to “About

  1. Tyler McClellan

    Very nice set of ideas. I would like to see a post on a unifying thread of your monetary macro conversations so far. In my mind its pretty clear what MMT rests on. It has nothing to with seignorage. It has nothing to do with the term structure of interest rates or the so called moneyness of debt, which is what is meant by the MMT fixation on the idea that all debt could be floating rate at one day maturity determined after the fact based upon the level that ought to have prevailed.

    For all of those things will just change the definition of the thing for which the interest rate used to represent an indifference point of stock balances. The interest rate of significance then will just be migrate to that which balances demand for stock X and this new backward-looking accrual.

    The key is this, can the real interest rate that is material in the value calculus for the stock of assets that will actually be augmented or consumed be made endogenous? And, if it can, to what extent and under what constraints and for what periods?

    Thats it, but that is a hell of a lot, and really is the jumping off point for all of sound thinking on monetary policy.

    I think the answer is yes, but basically only with outstanding fiscal effort (investment that both creates its own savings and also increases the stock value of existing investment seems in real terms even at the existing, or normalized if you like, interest rates). Meaning that a sound monetary authority can endogenize the real interest rate if it accommodates fiscal stimulus of a certain kind.

    This has nothing to do with the other goals of monetary policy which are more in the main stream and better understood (namely commitment to AD smoothing).

    Thank you, and best of luck.

    tyler.

  2. DavidN

    Just recently found your blog via mankiw (and read some of your earlier stuff in makeanysense) and I’m tempted to claim these blogs are one of the best I’ve read. I won’t claim I will or do agree with everything written but the writing is thoughtful and readable and I understand why Tyler Cowen gave you a glowing recommendation.

  3. StewartR

    Your discussions of economics principles and how they relate to what’s going on are the best I’ve read. Please keep it up!

  4. Andrew Jackson

    Hi,

    I am Andrew Jackson. I am a financial writer and want to contribute a guest post for your blog :-mattrognlie.com and it will be only published on your blog.

    I will send my article as an attachment in the .txt or word format.

    Hope you would like my proposal and give me an opportunity.

    May I send my article?

    Best Regards,
    Andrew Jackson
    Skype Name:a_jackson051

  5. Pingback: More on Piketty

  6. Aventura A

    Im a native born resident of NYC and have dealt in Real Estate development inside and outside of the city. I have often thought about the exact same dynamic that you describe in your paper.

    Affordable housing programs in this city are secretly ways that progressive politicians can maintain grip on power and real estate interests can get the zoning they need and at the same time keep prices high. Developers make money selling new product but increased supply hurts their holdings. Progressive politicians hate the middle class swing voter. Much easier to award the needed rezoning and variances to developers who play ball and will keep the mix of voters they need to sustain power. Voters dependant on housing programs.

    Your concept is so spot on and has so many implications once its clear to everyone whats going on.

    “Invest in Land they aren’t makeing more of it” …I believe that was Mark Twain.

  7. Lat June I wrote a Chinese language article published in the Hong Kong Economic Journal (a daily newspaper) on Piketty’s data and housing. The English language translation is available on my blog. It makes observations similar to yours which I read about on Bloomberg. I have some evidence from HK that might interest you. See
    http://www.wangyujian.com/?p=4409&lang=en
    Richard Wong

  8. Matt, glad you’re making some waves about the housing/land issue. Check out my book, which explains the economic issues caused by land rent privatization http://www.unitism.com (you can order it as a gift, if you like) and feel free to get in touch with me via my website.

  9. Christopher England

    I couldn’t help but to be reminded of Henry George: “Land is permanent and fixed in quantity…. But capital is an ephemeral production, dying from its birth, and therefore there is not the same compulsion to take existing capital as there is to take existing land.”

  10. Just read about your “triple hit”!

    As an MIT alum, I couldn’t be prouder.

    Shameless plug: take a look at my blog – http://www.pseudoeconomics.com

    It’d be great to discuss some ideas sometime!

    Cheers.

  11. 1brokeman

    Hi Matt, I just saw an article on your theory about wealthy inequality where can I read more because the news clip just showed just a little bit. I found it interesting.

    Desmond Owens

  12. Fred Drohsler

    Ref:  MIT – Housing & Income Inequality

    Dear Matthew Rognlie,

    I very much appreciated your notice of the housing burden on economics and applaud your courage to formalize those findings.  I too had tremendous misgivings on housing and always thought real estate prices in NYC were insane for decades and so I never bought even though I was an architect and “in the field”, so to speak.  Many, many people in NYC are paying dangerously high proportions of their income to rent and this is very troublesome – for them as well as society, as you well know.  This is a complex problem but laws need to be implemented to curb these costs, such as allowing rent deductions like we have for mortgages.

    That said, it is my observation that education costs have surpassed housing costs……….by significant margins.  

    For example, the recent NYC Education Budget was $24,800,000,000.  They had 52,000 graduates.  The math is $476,923 to educate each graduate –  I understand that I am including ONLY graduates per fiscal year – and not any underclass, drop-outs, special ed, etc. – but this provides one with a very quick guesstimate on costs per student.  Do this every year for thirteen years and one has a pretty good guest image for costs per student for K thru 12.

    An example of education costs in the city where I now live in upstate New York is their Education Budget was $35,350,000 with 114 graduates or $309,649 guesstimate per graduate.

    Another example is a town nearby where their School District Budget is
    $8,300,000 / 28 graduates = $296,429 per graduate total education cost.

    Therefore, New York State public school spending runs from about $200,000+ to $500,000 for a K thru 12 education – very approximate!  Add college – say $50,000 per year (minimum REAL costs – same say double this, or more) x 4 years and one gets a total education cost of $400,000 to $700,000.  Using the low number, if one started their working career with a $400,000 student loan to repay at market rates  it is doubtful one could get out from under this loan – ever!  If one has more education – Masters or Ph.D. – and/or expensive private schools or boarding schools – then there are VERY FEW jobs which pay enough to EVER recoup these expenses.  (I know public school costs are distributed throughout one’s lifetime – for many obvious and not so obvious reasons)  Please be aware that a lifetime of earnings of $50,000 a year average (x 40 years) equals $2,000,000 gross……then subtract taxes!  If one factors the many non-wage earners, stay-at-home moms, unemployed, dropouts, etc., then the expenses to income earners becomes noticeably present and overbearing.  It would be reasonable to conclude it is now questionable for wage earners to ever repay their TOTAL education………for non-wage earners it has now become impossible.

    Education has to be discussed and debated in a serious manner with changes made or our society will not survive these costs.  Same for health care.  Insurance only distributes costs over time. Ever increasing costs only makes insurance more expensive until it becomes unaffordable.  Of course, one can’t discuss health care without addressing nutrition…and farming…….etc.

    Housing, Education, and Health are fundamental to society but their dollar costs have become truly staggering.  We have to resolve both sides of this equation – product/service and cost/fee. 

    In closing, if the work/cost required to keep an organism alive / functioning exceeds the work/cost that the organism provides then this organism will perish…….along with the system………sort of where we’re heading today.  Economics dissolves when the ability to pay falls apart.

    Regards,

    Fred Drohsler, architect
    1-607-432-4425 mobile
    FredDrohsler@me.com

    BTW, Architecture, with a capital A, has become a profession where one is “forced” by economics to practice on mostly high-end private residences or seek corporate or institutional work.  I spent 45+ years in the practice, with 30+ years working for 20+ billionaires, including some high profile individuals in the business / finance field.  Low-end and public housing is a very, very difficult road……..there is just not enough fee and/or budget, usually evolving into an economic and/or legal problem in a hurry!  This is why most buildings we see are Construction, not Architecture.

  13. Jack

    Dear Mr. Rognlie,

    I hope this is the right medium to contact you with, but have you considered the decision by the BLS to use owner-estimated rent (OER) instead of house price as the cost of owner-occupied housing in 1983 as a turning point in Federal Reserve policy? This methodological change occurred as housing-driven inequality broke out of its postwar pattern. Would the miscalculation of inflation cause the mispricing of interest rates, favoring housing over other assets?

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