Wednesday, January 14, 2015

Midweek Market Monetarist Links and Summaries - 1/14/15

First, congratulations to Scott Sumner for his new appointment, as Director of Monetary Policy at the Mercatus Center! Among the other reasons I'm excited to see him assume this position, is that his work will become more accessible for individuals who are just beginning to take an active interest in economic issues. When I finally got online (2009), my first search for economics blogs turned up the Economics Roundtable. Then I found Econlog, where I learned about Scott Sumner from Arnold Kling. For many who have kept up with Scott Sumner in recent years, it's fair to suggest their lives haven't been quite the same, since. What a happy start for market monetarists in the New Year.

The ECB really needs a price level target (Scott Sumner) Level target now
Finding suitable candidates for the FOMC is now a bit of a mystery...Plumbers, Hawaiian community bankers and the FOMC
The recent upsurge in job creation came with slow wage growth: No, strong labor markets don't cause higher wages (never reason from a quantity change)
It remains to be seen whether structural reform is possible: Will Abenomics work? wrong question
Mainstream media contemplates the "unthinkable" They aren't coming back
Lately they have been difficult to "pin down": Questions for Keynesians
Special thanks are also in order for Ken Duda and Mark Sadowski! My new career

Scott at Econlog:
Currency is important for people with low incomes: Tax dodging and currency
One hopes that hyperinflation hasn't been the only emphasis: Are German schoolchildren taught about the 1929-32 deflation?
Simon Wren-Lewis on expansionary austerity
The Fed hasn't provided enough stimulus this time to boost wages: It's all in EC101

Both core and headline inflation remain too low for a rate rise (Marcus Nunes) http://thefaintofheart.wordpress.com/2015/01/08/will-they-be-confident-in-six-months-time/
Avinash Persaud writes a helpful article for the FT http://thefaintofheart.wordpress.com/2015/01/08/finally-reason/
Sweden continues to suffer: http://thefaintofheart.wordpress.com/2015/01/09/when-will-the-riksbank-realize-its-urgently-needed/
Marcus puts the wage question into much needed perspective: http://thefaintofheart.wordpress.com/2015/01/09/the-viscera-of-the-labor-market/
Before banks can lend, someone needs to be spending... http://thefaintofheart.wordpress.com/2015/01/10/when-the-economys-macro-foundations-crack/
A minor quibble with Eichengreen's "Hall of Mirrors" http://thefaintofheart.wordpress.com/2015/01/10/eichengreen-there-are-dangers-embedded-in-persistent-stability/
...then why the crisis? http://thefaintofheart.wordpress.com/2015/01/10/the-dsge-fetish/
What might the LFPR be now, had a nominal target been maintained: http://thefaintofheart.wordpress.com/2015/01/11/a-hell-of-a-coincidence/

Is economics becoming more "leftist"? (Bill Woolsey) Politics, Ideology, Micro and Macro
Presently there is not enough inflation to increase wages: Some Aggregate Supply and Demand Diagrams

The real risk-free rate has been on an upward trend (David Beckworth) http://macromarketmusings.blogspot.com/2015/01/dont-worry-be-happy-falling-treasury.html

(Bonnie Carr) Abraham Lincoln was well versed in economics, maybe more so than a few members of the FOMC...https://dajeeps.wordpress.com/2015/01/09/excerpt-abraham-lincoln-speech-on-the-sub-treasury-december-26-1839/

(Nick Rowe) "Fluctuations in inflation are a noisy signal of monetary disequilibrium, because the firms that do change prices are not always representative of the firms that don't." http://worthwhile.typepad.com/worthwhile_canadian_initi/2015/01/inflation-targeting-destroyed-its-own-signal.html
Nick builds a "cruddy" little one period model for Tony Yates and sends the Calvo fairy away (heh) http://worthwhile.typepad.com/worthwhile_canadian_initi/2015/01/a-model-where-ngdplt-beats-it.html

A sentimental story about Austrian friends! Includes a memorable line about the Keynesian price level (George Selgin) "Let this little engine of an assumption have its way, and it will handily pull the whole Keynesian freight-train, cute little IS-LM caboose included, along with it." http://www.freebanking.org/2015/01/11/something-nice-about-austrian-economics/

Problematic though it is, the mortgage tax deduction isn't likely to be changed. And "inequality" is built in. (Kevin Erdmann) http://idiosyncraticwhisk.blogspot.com/2015/01/evidence-of-real-estate-credit-problem.html

From the Mercatus Center press release (Lars Christensen) "The "Ralph G. Hawtrey Chair in Monetary Policy" - aptly named, indeed. http://marketmonetarist.com/2015/01/13/great-news-scott-sumner-joins-the-mercatus-center-at-george-mason-university/

Ben Steil and Dinah Walker, Correcting Paul Krugman's Austerity Chart for Monetary Effects Yields Very Different Results

Nicholas Cachanosky provides a new working paper: http://soundmoneyproject.org/2015/01/ngdp-targeting-is-five-percent-too-much/

Also of interest:

Fed ties! http://blogs.wsj.com/economics/2015/01/08/a-cult-following-for-fed-themed-tie-commemorating-end-of-stimulus/?mod=WSJBlog

College advice from Chris Blattman and a response from Dietz Vollrath

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