Wednesday, March 4, 2015

Midweek Market Monetarist Links and Summaries - 3/4/15

"Imagine the ECB had not raised its interest rate target in 2008 and 2011, but had lowered it." (David Beckworth)
In the first stage, spending fell in the core and periphery.
Marcus Nunes responds, with illustrations:
Permanent monetary injections are needed:

How much freedom does the Fed still have? (Marcus Nunes)
The post title says it all...
Expectations matter, and quickly:
Matt O' Brien gets tripped up:
A level target would offset velocity changes:
...a good "consumer spending trajectory"?

"Targeting real GDP is a bad idea." (Bill Woolsey) Nominal GDP Stability and Coordination
Clearing up some confusion re Milton Friedman, and more...Yates on Lags and a Balanced Budget

Tyler Cowen...ever the monetary policy skeptic! (Scott Sumner) The dog that did not bark
Marcus responds:
Negative yields are just another way to express that It turns out that the U.S. was never at the zero bound
Friedman misidentified monetary shocks by focusing on monetary aggregates: Long and variable leads (a reply to Tony Yates)
Once, what Krugman believed was not widely held...The great unwashed masses (there's weakness in numbers)

Scott at Econlog:
An unfortunate side effect of demand side models: Mission creep
How interest rates matter, and how they don't
A change of heart for Krugman: The last Keynesian left alive

How do big shocks to the exchange rate affect stock prices? (Evan Soltas)
How low can it go?
Evan delves into the Great Compression

A response for Elizabeth Breunig (Nick Rowe)
Perhaps the dividing line isn't really all that sharp...
"There is no transformation problem."

Balance sheet growth with no limit (Benjamin Cole)

"...income as a flow of money from firms to households." (David Glasner)
What are inventories...really?

Too many still conflate the financial panic with the economic plunge (Ravi Varghese)

Is the Fed drifting towards a "cruel mandate"? (Bonnie Carr)
Janet Yellen is not doing what needs to be done:

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