Wednesday, February 18, 2015

Midweek Market Monetarist Links and Summaries - 2/18/15

Will rates go back to zero in the next recession...or before? (Scott Sumner) The Phillips Curve and interest rate targeting are dead. What next?
Why doesn't the model work well in this instance? The musical chairs model in the UK
Britmouse responds: Musical chairs in Britain, Revisited
The bond market suffered in 1994: Do central banks worry more about the bond market or the labor market? Bill Woolsey responds: What do central bankers want?
Core PCE level targeting is better than (the current) PCE inflation targeting: Reducing Fed discretion (dedicated to John Taylor)
Scott finds seven (!) ways to "repair" a Robert Waldmann post: Let me know when critics respond to our actual ideas
Explaining a nominal target at a press conference would be less bother: Making life easier for central bankers
Austerity cannot be helped, if there is no help for monetary growth: Obama's horrible advice to Germany

Econlog posts from Scott:
The Wittgenstein test
Have an opinion about string theory? How about macroeconomics?
A response from Noah Smith - Why do non-experts think they know about macroeconomics?
If government has little pressure to do the right thing...Reasoning from a price change, example #341

"We just saw it from a different point of view" "Tangled up" in identities:
CAUTION Accounting Identity Handle With Care (David Glasner)
There's no point in arguing over definitions (Scott Sumner)
Sumner and Glasner on Identities (Bill Woolsey)
Savings and Investment Aren't the Same Thing and There's No Good Reason to Define Them As Such (David Glasner)
More Basic Macro (Bill Woolsey)

...but will this change the (fiscal) conversation? (Britmouse)

Too many similarities to the 1930s (Lars Christensen)
Things are improving at least for monetary policy...

Will monetary policy become more expansionary? (Marcus Nunes)
His voice has become somewhat muted:
Some board members take monetary policy very personally...
"extreme accomodation" it wasn't:
NAIRU does not make sense:
Marcus illustrates the difference between the two:
1981 versus 2007 in graphs:

Overlapping generations and further literature from Roger Farmer (Nick Rowe)
Nick debates a bit of (Piketty inspired) nonsense:
Of governments and banana machines...

Benjamin Cole has some fun with Cochrane's "econo-judo":
This is particularly surprising for those of us who remember Japan's heyday:

Politicized well past the point of being effective...(Bonnie Carr)

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