Unless some Market Monetarists were living (or at least vacationing) under a rock this week, it would have been hard not to notice that Scott Sumner returned from Australia! Some interesting online discussions ensued, and a number of Scott's posts were in fact reminiscent of "teaching" posts from a time when he wasn't so busy traveling, giving talks and the like. First I want to highlight three posts which discussed interest rates:
Yes, the economics profession really does believe low interest rates mean easy money
Interest rates versus the base
Real interest rates are not much better
Perhaps Scott's trip to Australia wouldn't have seemed "complete" without an online dialogue with John Quiggin. Here's two posts in which Mark Sadowski really contributes to the comment threads, and plenty of other MM commenters take part as well:
Lots of "back and forth", from these two Nick Rowe posts which also revived last year's MOE - MOA debate:
...where Scott responds to Nick's Tobin post:
There's only one James Tobin
Here, George Selgin responds to Scott's James Tobin post:
and Scott replies to George Selgin:
Bill Woolsey also replies to Selgin:
This "MOA versus MOE" from Scott is a good "wrap" for the above:
Nick Rowe asks, How can you get an economy into a liquidity trap?
And Marcus Nunes responds:
Earlier in the week, Marcus also responded to a David Andolfatto post, "Whither The Consumer?"
Hey, if the Fed isn't concerned about meeting its own specified targets, why should anyone else worry about meeting theirs?
Marcus illustrates in charts that the stock market crash was not responsible for the Great Recession:
For Labor Day, Marcus takes a look at unemployment in the last four cycles, since 1981:
Speaking of Labor Day, I like Lars Christensen's take:
It's a good thing I went back and double checked, or would have missed this important post from Scott Sumner:
The hot potato effect explained