Wednesday, October 9, 2013

Midweek Market Monetarist Links and Summaries - 10/9/13

For any number of reasons, Scott Sumner gets a lot of agreement in regards to this post:
We are not making progress on the microfoundations of business cycles
Lots of back and forth in the comments section of this post, about monetizing the debt:
A rose by any other name
Arnold Kling picks up part of a phrase in a paper title, with Does the money multiplier exist? and Scott responds to Arnold with this post, Money multipliers, real and imagined
Bill Woolsey also has a substantial response for both Arnold, and Scott:
http://monetaryfreedom-billwoolsey.blogspot.com/2013/10/the-money-multiplier.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MonetaryFreedom+%28Monetary+Freedom%29
A valid point indeed from Scott - libertarians should try to determine what governments do best, instead of constantly hating on them: Government shutdowns are not "small government". Nor are they fiscal policy"

As Marcus Nunes notes, sometimes people don't realize what a good job the RBA does to keep Australia out of recession: http://thefaintofheart.wordpress.com/2013/10/03/paying-homage-to-the-rba/
Even though the Great Moderation may not have represented "perfect" growth (whatever that is), it certainly didn't feel like the Great Stagnation to me: http://thefaintofheart.wordpress.com/2013/10/04/the-great-moderationthe-great-stagnation-not-according-to-phase-diagrams/
Where will Japan go? Marcus also charts the direct relation of the broad money supply (M3) to NGDP: http://thefaintofheart.wordpress.com/2013/10/07/japan-quo-vadis/

Lars Christensen has a link for David Laidler's latest paper - Reassessing the Thesis of the Monetary History - in this post: http://marketmonetarist.com/2013/10/07/david-laidler-should-be-awarded-the-nobel-prize-in-economics/
Marcus Nunes provides some highlights from Laidler's paper: http://thefaintofheart.wordpress.com/2013/10/08/one-more-reason-for-adopting-an-ngdp-level-target/

Nick Rowe devises a model with two equilibria for Paul Krugman:
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/10/twin-debt-equilibria.html
This made me smile. Brad Delong "set the perfect bait" for Nick by laying out an "implicit assumption too explicitly": http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/10/private-debt-public-debt-and-continuity.html
In a response to a Peter Dorman post, Nick replies that most macro models today also depend on current expectations for future policy:
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/10/degrees-of-freedom-forward-guidance-and-rules.html

David Beckworth explains how George Bailey was not doing the right counterfactual:
http://macromarketmusings.blogspot.com/2013/10/what-george-bailey-can-teach-us-about-qe.html
Yields on safe assets tend to rise during periods of QE: http://macromarketmusings.blogspot.com/2013/10/more-on-george-bailey-qe-and-shortage.html
An NGDP level target would help the Fed deal with the fallout of debt default:
http://macromarketmusings.blogspot.com/2013/10/note-to-fed-get-out-in-front-of.html

David Glasner posts part four of Hawtrey's Good and Bad Trade:
http://uneasymoney.com/2013/10/04/hawtreys-good-and-bad-trade-part-iv-the-inherent-instability-of-credit/
Also, part five: http://uneasymoney.com/2013/10/08/hawtreys-good-and-bad-trade-part-v-did-hawtrey-discover-ppp/

There is a lot of reaction to a John Hilsenrath article in the WSJ (which is gated), and I believe this is the title: "Tense Negotiations Inside the Fed Produced Muddles Signals to Markets"
Ryan Avent responds:
http://www.economist.com/blogs/freeexchange/2013/10/monetary-policy?fsrc=rss
Responses from Marcus Nunes, Matt Yglesias and Scott Sumner, also here
Tim Duy of Economists View also weighs in:
Fed Watch: Credibility on the Line

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