Category Monetary policy
The Fed’s Dark Age communications strategy
One sentence in Fed vice-chair Janet Yellen's speech caught my eye: "Indeed, I believe that the Federal Reserve qualifies as one of the most transparent central banks in the world." That is total bullshit. The Fed is one of the least transparent central banks in the world. Ironically, in the excellent paragraph immediately following her […]
The Bank of Canada revises down its forecast
Not much to add to what's been said elsewhere, except that I've updated my series of graphs documenting the evolution of the Bank of Canada's forecasts.
All Chuck Norris really needs is stamina
This is my fourth and last Chuck Norris post. I'm getting bored with the metaphor too. But there is something many people missed in my last posts. It's important. Andy Harless explains it in his post. I'm going to explain it my way. Suppose Chuck Norris keeps on fighting for an NGDP level path target […]
Isn’t Chuck Norris American?
He doesn't need to apply for a Green Card to do the same work in the US that he's been doing outside the US. Why can't he work in the US too? The US and Japan do not have inflation targeting central banks. Nobody knows what they are targeting, because they don't say. Canada, Sweden, […]
Did God overinvest in Land?
I had a short argument with Greg Ransom a couple of months back. Greg won. But actually, I wasn't really arguing with him. I was on his side to begin with, though it did help me clarify my views. Question. "What is the economic difference between capital and land?" If you answered: "People made capital […]
E(NGDP) level-path targeting for the people of the concrete steppes
"But what concrete steps will the Fed actually take to raise Nominal GDP? Can anyone tell me that?" I must have heard that question a hundred times over the last couple of years. And a dozen more times in the last day, ever since Paul Krugman endorsed the proposal to target NGDP. I always imagine […]
China and the Eurozone
My knowledge of what's happening in China is very slight. But from what I've been reading over the last few months (like this today), it sounds worrying. Others may have noticed this parallel, but just in case you missed it, I'm going to make it. Compare China vs the US to Spain or Ireland vs […]
Monetary policy as threat strategy. Chuck Norris and central banks.
Central banks run monetary policy not so much by doing things, but by threatening to do things. If their threats are credible, we never observe them carrying out those threats, and we often observe them doing the exact opposite A credible central bank is a bit like Chuck Norris. (Apologies to Lars Christensen for stealing […]
The optimum size of the central bank?
In 1969, Milton Friedman wrote an essay on "The Optimum Quantity of Money". Another way of framing this question is to ask: what is the optimum long run growth rate in the money supply, or the optimum long run inflation rate? I want to suggest a different way of framing this same question: what is […]
James Hamilton on Christopher Sims and identifying monetary policy “shocks”
I am not an econometrician. I'm not very good at econometrics. Read this post in that light. I think that what some econometricians are doing is horribly wrong. They are making a wildly implausible assumption. I want to give my reactions to what James Hamilton said about what Christopher Sims said. James is nicely clear.
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