Wednesday, June 18, 2014

Midweek Market Monetarist Links and Summaries - 6/18/14

Scott Sumner provides an explanation for Simon Wren-Lewis: Why are market monetarists such extremists on fiscal policy?
A change in IOR affects demand for base money, while a change in the fed funds rate is an effect of a change in the supply of base money: Interest rates and monetary policy
"Seriously, we need two Federal Reserve Boards. One for monetary policy and one for banking regulation." ...At the very least, the Fed should be able to concentrate on monetary! Why we are in this mess

Some Econlog posts from Scott:
Inflation and NGDP growth need to be taken into consideration, first: Never reason from an interest rate change
Noah Smith has changed his mind about Abe "...unlike everyone else in the world, Abe listened to Milton Friedman, and the results are looking good": Fiscally inefficient monetary policy
What does 1933-80 tell us about banking regulation? Quite a lot, it turns out.

A key figure illustrates the story (Lars Christensen) http://marketmonetarist.com/2014/06/16/belka-gate-the-polish-version-of-the-sumner-critique/
Minimum wage discussions will bring dissenters "out of the woodwork" every time! http://marketmonetarist.com/2014/06/16/paul-krugman-puts-the-imf-straight-and-it-is-not-what-you-think/
In the picture, from left to right: Lars, Scott, and Marcus http://marketmonetarist.com/2014/06/18/sumner-nunes-and-christensen-in-london/

"They are all the same" (Nick Rowe) Bank Runs, Keynesian Multipliers, Monetarist Cold Potatoes

(Mark Sadowski) Where does one measure the ZLB?
http://thefaintofheart.wordpress.com/2014/06/11/simon-wren-lewis-needs-help-figuring-out-what-nothing-and-zero-mean-and-the-real-asymmetry-between-monetarists-and-fiscalists/
More at stake, than just debt stabilization:
http://thefaintofheart.wordpress.com/2014/06/12/is-fiscalist-policy-advice-consistent-with-their-research-and-just-how-interested-is-simon-wren-lewis-in-debt-stabilization/
Monetary policy and AS shocks needs to be incorporated into the fiscalist model: http://thefaintofheart.wordpress.com/2014/06/13/stuff-happens-or-why-the-fiscalist-model-never-seems-to-fit-the-data/
Some of us are convinced that spending comes first: http://thefaintofheart.wordpress.com/2014/06/14/does-lending-cause-nominal-spending-or-does-nominal-spending-cause-lending/

Has Cochrane had a change of heart? (Benjamin Cole) http://thefaintofheart.wordpress.com/2014/06/13/how-john-h-cochrane-quit-worrying-and-learned-to-love-the-monetary-bomb/

Once, central bankers were resistant to the notion that inflation was their responsibility (Lorenzo) http://thefaintofheart.wordpress.com/2014/06/14/why-monetarist-victory-is-necessary-so-central-banks-cannot-hide/
An important distinction: http://skepticlawyer.com.au/2014/06/13/hard-money-is-not-the-same-as-sound-money/

Britmouse highlights an example of money demand shock:
http://uneconomical.wordpress.com/2014/06/12/recessions-are-always-and-everywhere-a-monetary-phenomenon-in-greece-too/
Is random and unpredictable behavior supposed to inspire confidence?
http://uneconomical.wordpress.com/2014/06/13/rules-not-discretion-foster-stability/
Productivity data doesn't matter for setting monetary policy. Nominal wages/income? 100 per cent. http://uneconomical.wordpress.com/2014/06/17/inflation-inflation-there-is-no-inflation/
A useful Eurostat time series: http://uneconomical.wordpress.com/2014/06/17/administered-prices-revisited/

Bonnie Carr looks at a 2010 post from Gary Becker, regarding Fed Independence

"The system is no longer plagued by unsychronized prices..." http://economicsophisms.com/2014/06/16/btw-the-new-chart-is-up-at-efficientforecast-com/

Sometimes a bit of logic really helps: "we're all in this together" (Kevin Erdmann) http://idiosyncraticwhisk.blogspot.com/2014/06/if-we-are-100-then-who-will-be-scapegoat.html

History making - in real time (Giles Wilkes) http://freethinkecon.wordpress.com/2014/06/15/a-defence-of-hot-air/

Like James Pethokoukis, I've got some issues with this forecast: Team Obama: Sorry America, the 'new normal' may be here to stay

Also of interest:

"Should developers be driving the regional conversation on housing needs?" All together now...No! http://www.newgeography.com/content/004363-circling-brain-drain

Sometimes foreign policy just gets downright strange: http://daviddfriedman.blogspot.com/2014/06/the-tangled-web-of-foreign-policy.html

While implications for the immediate U.S. economy could be minor, the world is changing nonetheless:
http://econbrowser.com/archives/2014/06/iraq-oil-markets-and-the-u-s-economy

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