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Tag Archives: David Beckworth

Market Monetarists: The Good, the Bad, and the Ugly

Actually my title doesn’t really make sense; I couldn’t think of anything clever. I really liked this David Beckworth post, talking about the breakdown of the Fed’s “floor system.” In fact, I liked it so much that I based my article in the forthcoming issue of The Lara-Murphy Report on it. So score +1 for the Market Monetarists. However, in the article I had to remind the reader of conditions in the fall of 2008. I wanted to explain why the Fed was afraid to let...

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Potpourri

==> This is an old but very interesting post from Mark Bahner on atmospheric CO2 and how quickly it could be removed if need be. ==> A very interesting post from David Beckworth on the yield curve (HT2 Scott Sumner). But most important–look at this analysis from Ben Bernanke back in 2006!! Not only was the Bernank totally wrong, but his wrongness is relevant to right now. ==> An interview with Stan Bush, who was instrumental in one of the greatest scenes in...

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Potpourri

==> This is an old but very interesting post from Mark Bahner on atmospheric CO2 and how quickly it could be removed if need be. ==> A very interesting post from David Beckworth on the yield curve (HT2 Scott Sumner). But most important–look at this analysis from Ben Bernanke back in 2006!! Not only was the Bernank totally wrong, but his wrongness is relevant to right now. ==> An interview with Stan Bush, who was instrumental in one of the greatest scenes in...

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Open Borders and NGDP Targeting: A Numerical Example

In my last post, in which I argued that Open Borders plus NGDP (or even total labor compensation) targeting would lead to disaster, I fired off some quick numbers that (although technically not wrong) made it look as if I were missing the basic logic of Sumner’s framework. Thus, David Beckworth in the comments said: The point of a NGDP target (or some variant of it) is to stabilize the nominal income (or nominal wage) growth and allow output prices to fluctuate...

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David Beckworth Adopts Scott Sumner Criterion for “Market Expectations”

In this post, David Beckworth uses federal funds futures contracts to glean information about “the market”‘s expectations of future monetary policy shifts. Obviously there are caveats about reasoning from an expected price change, but I think this is a good avenue for the Market Monetarists to win skeptics over. In particular, if people in (say) June 2008 thought that the Fed would raise the fed funds target over the following year, then that is an obvious sense in which the market...

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Step #4 In My Dispute With Beckworth: The Market (Apparently) Lowered Forecast of Future Fed Funds After Critical 2008 Meetings

I have a running response to David Beckworth’s defense of Sen. Ted Cruz’s remarks concerning the causes of the 2008 financial crisis. (Here are links to #1, #2, and #3.) This, #4, is my final argument, though I may do follow-ups based on reactions from David and/or his fans in the comments. In earlier steps I pushed back on Beckworth’s argument that because the spread between long and short Treasury yields increased during 2008, that this meant the market was expecting a future rate...

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Step #3 In My Dispute With Beckworth: Moving From Davie on Interest Rates to David on Interest Rates

First, a recap: ==> In Step #1 I made the obvious point that if an employer in late October says that the paycheck will be $1000 higher in November than previously expected, and the paycheck in December will be $700 higher than previously expected, that clearly this is a more generous policy, relative to the path expected the moment before the announcement. The fact that workers now expect a $300 pay cut in December, relative to November, is misleading and irrelevant. What matters is...

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Step #1 in My Dispute With Beckworth: Defining the Stance of Future Policy

I realize that when I’m being too cutesy, it’s not clear what my overall purpose is. So let me first state the overall situation, and then proceed to the (narrow) point of this particular post. Overall: Recently, David Beckworth wrote a post defending Ted Cruz’s remarks about the Fed in 2008. David had two main empirical arguments: First, if we look at the spread between 1-year and shorter-term Treasury yields, we see that it increases going into the fall of 2008. There is a line of...

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Tackling Ted Cruz

In my latest piece at Mises.org I take on the notion that the Fed’s announcement of “tight” money in the summer of 2008 is ultimately to blame for the financial crisis. I am running around with holiday travel but hopefully by the weekend I will return to my earlier post (here on the blog) about Fed statements in the summer of 2008. In the meantime, this Mises.org article will give you fodder. One thing right now, though: What you CANNOT do is think you are taking the Sumner/Beckworth/Cruz...

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