[The FIAT Thread] The Joint Committee on FIAT Discussion Session. - 28 September 2026

[u/AutoModerator]

Here ye, here ye, the Joint Committee on Finance, Infrastructure, Academia, and Technology is now in session. In this session of the FIAT committee, all are welcome to come and discuss economics and related topics. No RIs are needed to post: the fiat thread is for both senators and regular ol’ house reps. The subreddit parliamentarians, however, will still be moderating the discussion to ensure nobody gets too out of order and retain the right to occasionally mark certain comment chains as being for senators only.

[u/vanmo96]

It's my understanding that inflation used to be popular among debt holders (because the debt would stay the same while income would increase, thus reducing the debt relative to income). Why is that not the case now (cf. the 2020s inflation backlash)? Is it the nature of inflation, of debt, of spending habits, or something else entirely?

[u/MachineTeaching → u/vanmo96]

-It's only good if your debt is not indexed to inflation and your income actually goes up. Inflation caused by supply shocks often causes real incomes to fall and nominal ones to stagnate or fall.

-People have gotten used to low and stable inflation and just hate high and volatile inflation.

[u/Quowe_50mg]

Forbidden Comparisons:

A Structural Model of Applied Economics in a World Without Callaway and Sant'Anna (2021)*

John Smith**

October 7, 2026

Some theorize about what the world would have looked like if Hitler and the Nazis had not gained control of Germany in 1933. In this paper, we theorize about what would have happened if the Difference-in-Differences Nazis had not taken control of applied econometrics in recent years. We develop and estimate a structural model to examine what applied microeconomics would look like today if Callaway and Sant'Anna (2021) had never been written. Researchers in our model choose an estimator to maximize expected publication utility subject to a referee constraint, an advisor constraint, and a strong prior that "it's basically fine." Identification comes from exogenous variation in the timing of when each researcher's job market paper was destroyed by a seminar question about staggered adoption. Simulating this counterfactual, we document three main findings: (1) appendices are now 30% longer, (2) seminars are 6.5% more hostile, and (3) the average utility of the profession has slightly increased, despite the modal economist being worse off. This result is driven by econometricians in each department gaining enough utility to outweigh the welfare losses experienced by applied economists. Overall, we find little evidence of positive effects from the new "Diff-in-Diff Nazis."

JEL Codes: C23, C21, A11

Keywords: difference-in-differences, counterfactual history, negative weights, forbid-den comparisons

*We thank seminar participants who asked "but are your weights negative?" at every single talk since 2021. All remaining biases are heterogeneous across cohorts and are not our fault. This is a preliminary draft. Please do not cite it in your pre-analysis plan.

**Name redacted for fear of retaliation by SS (Shift-Share) Officers. Department of Economics, University of Chicago. Treated in 2021; still waiting for parallel trends.

[u/Quowe_50mg → u/Quowe_50mg]

(not mine)

[u/lawrencekhoo]

Kinda relevant now, with the Iran war dragging on indefinitely. What are opinions on the proper way to model an adverse AS shock? And, what should the policy response be (fiscal, monetary, both, neither)?

[u/gorbachev → u/lawrencekhoo]

I mean, monetary policy certainly isn't going to do anything about the first order components of the shock....

[u/lawrencekhoo → u/gorbachev]

Yes, but what should the fed do? Maintain the inflation target? Consider both inflation and unemployment?

[u/FatBabyGiraffe → u/lawrencekhoo]

Consider both but more weight to inflation. Unemployment has hovered around 4% since Jan 2022. I would have raised rates years ago.

[u/No_March_5371]

bad kitty

[u/New_Confidence4197 → u/No_March_5371]

when my cat knocked a full coffee into my tool belt last week i swear she calculated the splash radius to maximize damage

[u/No_March_5371 → u/New_Confidence4197]

clever kitty