Anatomy of an Analogy

New York Fed Governor, William Dudley entertained his audience during a recent speech with an analogy about the US central bank’s aggressive monetary policy stance. The US economy, he mused, is like a car stuck in the mud: ‘You don’t stop pushing the moment the wheels start turning – you keep pushing until the car is rolling and is clearly free.’ The reasoning was undeniable. It is obvious that if you stop pushing the car will simply slip back into the mud. Then you will have to start all over again after having already spent a lot of your energy. Continue reading

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Erratum!

Kreuzwort

A tiny section is reserved in every newspaper for prior errors, typos, misunderstandings and other bloopers to be publicly set right. These errors are often mildly embarrassing for the editor so, in the eyes of the reader, a printed admission of guilt is punishment enough and makes everyone feel better. The erratum published in yesterday’s Financial Times might be a little more difficult to digest for some readers though. It also provides an interesting demonstration of how cognitive dissonance is reduced and induced. Due to a production error, it seems the clues and the grid for a crossword puzzle published some days earlier did not match. The puzzle was literally insolvable. Continue reading