Wednesday, June 4, 2014

Midweek Market Monetarist Links and Summaries - 6/4/14

"When you say interest rates will be low - you tell the markets you plan to fail." (Lars Christensen) http://marketmonetarist.com/2014/06/01/committed-to-a-failing-strategy-low-for-longer-deflation-for-longer/
Excess regulations are only making banking more fragile:
http://marketmonetarist.com/2014/05/29/julien-noizet-on-banking-regulation-and-the-importance-of-intragroup-funding/
More taxes seemed like a "good" idea at the time...http://marketmonetarist.com/2014/06/03/a-clean-break-with-hollande-a-lesson-for-piketty/

"Keep in mind that France has a wide range of policies that reduce aggregate supply." (Scott Sumner) How to think about France
Whatever the Fed wants, the Fed gets: Tim Duy on monetary offset
He understands government data better than many: Mark Sadowski nails it again
Interest on reserves certainly makes it harder to teach monetary theory: Reasoning from multiple price changes
Tim Duy is also concerned about the Fed's low rates: Tim Duy on monetary offset
How might the new minimum wage play out? A few thoughts on Seattle

Some Econlog posts from Scott Sumner:
Even Wolfgang Munchau has his doubts: Inflation targeting. It's even worse than you think
Can we have confidence in our opinions on immigration?
How accurate was this portrayal? Piketty on Kuznets

And cars are but one example...(Britmouse) http://uneconomical.wordpress.com/2014/05/29/theres-no-such-thing-as-car-prices/

Always, human components of progress need to be considered (Kevin Erdmann):
http://idiosyncraticwhisk.blogspot.com/2014/05/creative-destruction-thankfully-applies.html

Capital needs to be considered in terms of physical units, not as a vague homogeneous substance. (David Glasner) http://uneasymoney.com/2014/05/28/thomas-piketty-and-joseph-schumpeter-and-gerard-debreu/

The zero lower bound can be resolved without making paper currency obsolete. (David Beckworth) http://macromarketmusings.blogspot.com/2014/05/is-it-time.html

Monetary components matter (Marcus Nunes) http://thefaintofheart.wordpress.com/2014/05/28/martin-feldstein-is-more-hopeful-than-steve-hanke-unfortunately-hanke-is-right/
Sometimes you get lucky and don't even know why: http://thefaintofheart.wordpress.com/2014/05/29/coins-missing-in-the-fountain-while-some-wont-be-missed/
Once brought down to a lower trend, it would be quite difficult to reverse: http://thefaintofheart.wordpress.com/2014/05/30/if-you-dont-care-to-go-up-to-meet-him-even-if-halfway-hell-come-all-the-way-down-to-meet-you/
Unfortunately, a focus on price stability misses the larger picture: http://thefaintofheart.wordpress.com/2014/05/30/lee-ohanian-remains-in-denial/
2% inflation today, is not the healthy economy that it may appear... http://thefaintofheart.wordpress.com/2014/05/31/implications-of-the-excitement-about-inflation-inching-back-to-2/

Divisia now shows that money growth is practically dead in the water (Benjamin Cole) http://thefaintofheart.wordpress.com/2014/05/31/money-is-not-long-run-neutral-for-people-who-live-less-than-200-years-or-is-the-cfss-divisia-right-the-fed-is-dead-on-the-money-supply/
The American Right, let alone much of the economics profession, was not always fixated on inflation: http://thefaintofheart.wordpress.com/2014/06/01/the-way-we-were-without-revisionist-history/

Ben Southwood of the Adam Smith Institute makes an argument for a nominal GDP target: The eurozone is in dire need of nominal income targeting

In a sense, the U.S. banking system has moved towards 100% reserves in recent years (Nick Rowe) http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/06/100-reserves-and-interest-on-reserves.html
Nick looks at John Cochrane's Fiscal Theory of the Price Level from a different perspective: http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/06/john-cochrane-on-monetary-policy-with-interest-on-reserves.html

Also of interest:

Why has the Federal Reserve conducted monetary policy for so long, with so little reference to the money supply? (Michael Belongia and Peter Ireland) http://www.economics21.org/commentary/money-still-matters

One way to consider labor market participation (Timothy Taylor): http://conversableeconomist.blogspot.com/2014/05/hours-worked-no-change-output-up-42.html

And last, but certainly not least (from Tim Harford):
"The critics of GDP give it too much credit. It is a painstaking attempt to try to measure the total production of the economy. It is not the guiding star for economic policy, public morality or anything else."

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