Earlier in the week, Nick Rowe provided this well thought out (and lengthy) post:
Teaching Notes on Banks and Money
Also, what happened in 2008? Why didn't the cut in interest rates prevent aggregate demand from falling?
A lesson on comparative advantage:http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/09/teaching-comparative-advantage-barter-vs-money.html
Two market monetarists finally get to meet each other - Scott Sumner and Lars Christensen. Of course Lars can really make a person smile by being his hyper enthusiastic self:
And they "agree to disagree" about the taper:
As for central bankers who think they can "beat the market":
Speaking of taper, that's the question Scott Sumner asked in his first article for The Week. Why do it?
Scott explores some confusions in the relationship between interest rates and money, in this post: Interest rates and the face/vase problem
Some explanation regarding John Cochrane and liquidity traps:
The Fed non-taper turned out to be a pretty big deal. And when Tyler Cowen questioned why emerging markets would react so, Scott reminds him that Monetary policy is a really big deal.
Bill Woolsey also notes the continuance in QE:
He highlights a post by Ryan Avent, "Missing the forest for the QEs":
and also adds clarification for Nick Rowe's discussion regarding interest rates, linked above.
Marcus Nunes shows - in graphs - the factors that the Fed chose to overlook in a fateful meeting, five years ago: http://thefaintofheart.wordpress.com/2013/09/18/5-year-anniversary-of-a-fateful-decision/
The Fed keeps pulling new tricks out of its hat as growth slows...
Aaand, what we have here is a failure to communicate:
Justin Irving runs simulations for NGDPLT with measurement error, and in the process, notes that the simulations suggest price level targeting would be a poor substitute:
David Beckworth provides evidence that monetary policy can still be quite effective at the zero bound: http://macromarketmusings.blogspot.com/2013/09/monetary-policy-at-zlb-three-quasi_25.html
David also shares an exchange he had with Miles Kimball re the Fed's new fixed rate:
James Pethokoukis of AEI has a 5 questions for five days series this week, regarding market monetarism and quantitative easing. Here is the first post (September 23rd):
Also, in his article for The National Review, Pethokoukis stresses that QE is working:
George Selgin gave a talk on Free Banking recently, in which he asked: what is the counterfactual for central banks? http://cafehayek.com/2013/09/george-selgin-on-free-banking-and-the-free-society.html
David Glasner provides the second installment on Hawtrey's Good and Bad Trade:
Britmouse reminds us that government attempts to control prices are not the way to a better marketplace: http://uneconomical.wordpress.com/2013/09/25/relative-price-changes-are-a-good-thing-price-controls-are-not/
The Browser picked up this story about Janet Yellen recently:
And just for fun, I thought some of my readers might enjoy an illustrated brief history of U.S. government misadventures with tax dollars, from Business Pundit: