Wednesday, November 27, 2013

Midweek Market Monetarist Links and Summaries - 11/27/13

Scott Sumner put together a flurry of posts earlier this week, prior to a heavy travel schedule for the holidays. He may be putting up some older posts till the end of the year, as well.
Yes, we still need QE, duh. Calling supply side...calling supply side...Rick Santelli explains the real reason for QE3
Scott explains some logic about helicopter drops in It's all about the Benjamins
This post looks at one of the more interesting debates of the week: Aggregate demand - it's not what you think  Nick Rowe's response: http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/11/does-the-invention-of-nifty-new-goods-increase-ad.html
Some things are harder to frame or put into context, than others: Is the zero bound the "real problem"  (i.e. the nominal problem)
Scott also provides a good Lars Svensson link: http://larseosvensson.se/2013/11/14/ekonomistas-zero-inflation-leads-to-higher-debt-substantially-higher-debt-english-translation/#more-1345
A beautiful picture of Mt. Fuji doesn't mean that a Japan outcome is desirable...Reasoning from a price change, on steroids
At least Bullard recognized the reverse causation: James Bullard on monetary policy in 2008
...or will the U.S. start to look like California? Memories of the Carter administration
Speaking of Bullard...from Andolfatto:
http://andolfatto.blogspot.com/2013/11/connecting-academic-and-policy-worlds.html

David Glasner - If prices are falling without output rising, something is very wrong: http://uneasymoney.com/2013/11/21/what-makes-deflation-good/

Miles Kimball cites an interesting quote from Ignatius Donnelly, re deflation:
http://blog.supplysideliberal.com/post/67821914166/19th-century-populist-and-monetary-dove-Ignatius

Name that target! Just don't expect it to be what the FOMC actually has in mind...(Marcus Nunes)
http://thefaintofheart.wordpress.com/2013/11/20/the-fomc-has-been-doing-a-lot-of-expecting-and-anticipating/
Pulling petals from daisies, that ought to work: http://thefaintofheart.wordpress.com/2013/11/20/love-me-love-me-not/
Take care of monetary policy, then tend to the details: http://thefaintofheart.wordpress.com/2013/11/21/theres-no-secular-stagnation-its-about-misguided-monetary-policy/
Unfortunately, monetary policy was a sidekick for White House planners in the 60s:
http://thefaintofheart.wordpress.com/2013/11/22/conservatives-praise-kennedy/
Contrary to popular opinion and politics, it really helps to keep an open mind:
http://thefaintofheart.wordpress.com/2013/11/23/kocherlakota-born-again-christian/
Central banks in the "kitchen": wrong cookbook, too many bubbles and not enough heat
http://thefaintofheart.wordpress.com/2013/11/25/all-central-banks-in-practice-are-acting-alike/
One gets the feeling sometimes that neither group wants money to normalize again. I want money to be normal:
http://thefaintofheart.wordpress.com/2013/11/25/deep-down-economists-are-mean-sobs/
High energy prices? Big mortgages? Not to worry, just take another chunk out of spending capacity:
http://thefaintofheart.wordpress.com/2013/11/26/who-to-blame-for-what/

Lars Christensen highlights a recent paper from Will Luther and Alex Salter:
http://marketmonetarist.com/2013/11/25/synthesizing-state-and-spontaneous-order-theories-of-money-2/
Lars uses a New Keynesian framework with Taylor Rule to explain a move away from the ZLB:
http://marketmonetarist.com/2013/11/26/a-scary-story-the-zero-lower-bound-and-exchange-rate-dynamics/

We don't have to settle for the ignorance, that some bureaucrats are inclined to leave us with (Bonnie Carr) http://dajeeps.wordpress.com/2013/11/21/fear-itself/
The post title says it all:
http://dajeeps.wordpress.com/2013/11/26/fresh-or-salty-framing-effects-distract-from-cause-and-effect/

(Yichuan Wang) Key counterfactual - What if the Fed hadn't done QE?
http://qz.com/150592/stop-the-taper-talk-the-fed-has-actually-done-too-little/

(Nick Rowe) If there is an excess demand for money, Say's Law fails across space and time:
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/11/intertemporal-says-law.html

Britmouse posts the latest UK nominal figures:
http://uneconomical.wordpress.com/2013/11/27/uk-2013-q3-nominal-gdp/

The recurring mistake for conservatives has been an obsession with money not losing value (Lorenzo) http://skepticlawyer.com.au/2013/11/20/why-conservatives-dont-learn-from-history/
Lorenzo just posted a good intro of NGDP targeting for a lay audience:
http://skepticlawyer.com.au/2013/11/27/money-prices-assets-and-evasions-of-responsibility/

Tim Duy notes that the approaching taper is not data dependent:
http://economistsview.typepad.com/economistsview/2013/11/fed-watch-desperate-to-taper.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29

Will an increased target rate of inflation help us out of the present economic quagmire? Think again (George Selgin) http://www.freebanking.org/2013/11/21/four-old-fashioned-monetarist-heresies/
George reacts to another clueless response by Richard Fisher: http://www.freebanking.org/2013/11/20/deja-vu-all-over-again/

Labor share of income has an ever-moving and unknowable optimum. A thoughtful post from Kevin Erdmann: http://idiosyncraticwhisk.blogspot.com/2013/11/labor-share-of-income.html

Also of interest:

Derek Thompson provides a follow up to an earlier Emily Badger article:
http://www.theatlantic.com/business/archive/2013/11/your-brain-on-poverty-why-poor-people-seem-to-make-bad-decisions/281780/

Sometimes, "mortgage" is just another word for nothing left to lose:
http://www.aei-ideas.org/2013/11/how-mortgage-became-just-another-word-for-trouble/

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