Wednesday, May 6, 2015

Midweek Market Monetarist Links and Summaries - 5/6/15

We all wish Lars Christensen the best of luck, as he prepares to embark on his new career which includes plenty of public speaking...

(George Selgin) The Fed now manages a highly dysfunctional monetary system. And a bloated Fed sheet is not utilizing monetary policy on the public's behalf.

The time for applying "CPR" is past (Marcus Nunes)
All is (supposedly) well:
Things look all right from down here...
What can be regained now?
In spite of his knowledge, too "sold" on IT
Where was that Rooseveltian resolve?
Unfortunate reasoning:
In 1933, inflation expectations had some help...

Small government talk is mostly rhetoric (Scott Sumner) Now that the GOP has gained control of the Senate
Scott responds to a post from Dean Baker: No, trade deficits do not cause unemployment
For Baker's response in comments: Dean Baker reasons from a quantity change
Has Keynesian economics "jumped the shark"? The WSJ Editorial Board, Paul Krugman and Simon Wren-Lewis
"Shocks" as policy actions which change the stance of monetary policy Stance, shock, cause
Some interesting city population stories: Baltimore's decline

Scott at Econlog
How can economists measure the impact of monetary policy, if they aren't even in agreement as to what monetary policy is? The problem with "shocks"
It would have been worse if the original Taylor rule wasn't modified...Robots, committees or markets?
How will the public react to two consecutive quarters of almost no growth? More evidence for a Great Stagnation
Plenty of confusion all around..No, the public doesn't understand comparative advantage (or supply and demand)
Yes it's possible: In 1987, the Fed prevented another Great Recession by doing nothing
Just the same, growth slowed. Yes, falling oil prices were like a tax cut

How useful are vector auto regressions...really? (Nick Rowe)
Surely there's something to buy besides government debt:

David Glasner responds to Roger Farmer:
Taylor wants a strategy "for setting instruments of monetary policy"

Too polite? (Bonnie Carr)
Indeed, we are being chased by the "bears"!

Is the Fed's decision to tighten this year "baked in the cake"? (David Beckworth)
Bonnie Carr responds:

Josh Hendrickson considers the New Keynesian model:

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