Tuesday , October 15 2019
Home / Tag Archives: Monetary Policy (page 10)

Tag Archives: Monetary Policy

Does MMT need a mathematical model? Or greater self-awareness?

Noah Smith has a very good post discussing MMT models on the economy. Here’s how he concludes: I’m not confident in my ability to answer these and other important questions by reading L. Randall Wray blog posts, or long online explainers, or wordy MMT papers. I want to be able to read a concrete, formal, well-specified model like the Tcherneva model above, and answer these questions myself. And the rest of the non-MMT econ deserves this as well. I can see some value...

Read More »

Central Banks Are Messing With Your Mind – Literally

In the March 8 episode of the SchiffGold Friday Gold Wrap podcast, Mike Maharrey emphasized the importance of understanding sound economic theory. And as economist Frank Shostak explained, facts and figures aren’t enough to digest what’s going on in the economy.In order to really make sense of the data one must have a , which stands on its own feet, and did not originate from the data. By means of a theory, one could scrutinize the data and could then try to make sense out of it.”In a...

Read More »

Some Links

My intrepid Mercatus Center colleague Veronique de Rugy again warns of the danger of any scheme for government to promote more paid family leave. A slice: A 2018 paper by Cato Institute analyst Vanessa Brown Calder reviews the literature on the impact of paid leave. She found that a government-provided solution to the issue won’t result in the proverbial free lunch for which supporters hope. Trade-offs for paid leave policies vary depending on policy specifics, but they include...

Read More »

Market mimicking monetary policy

My preferred monetary policy would involve stabilizing the price of NGDP futures contracts. Under this regime, important variables such as the money supply and interest rates would be determined by the market, set at a level that the market expected would lead to on-target growth in NGDP. This sort of regime is not likely to be adopted in the near future, and thus I’ve also recommended a long series of incremental policy reforms that are more politically feasible....

Read More »

Hummel on Modern Monetary Theory

If we focus solely on MMT’s [Modern Monetary Theory’s] essential claims about money, distinct from any associated policy proposals, it is neither new nor modern. It simply justifies funding government expenditures by issuing fiat money, which, of course, all economists have long been aware is possible. MMT then attempts to downplay the potential inflationary impact of such financing with manipulations of the government and central-bank balance sheets. But it merely...

Read More »

The NGDP targeting boom

Irving Fisher proposed a price level target in the early 1900s, and numerous other reformers had already been advocating the policy over the previous 100 years. Sweden dabbled with the idea in the 1930s, but it wasn’t until the 1980s that inflation targeting caught on with central bankers. Nominal GDP targeting is another idea that’s been discussed over a long period of time, going back at least to the interwar period. It wasn’t until 2010, however, that the idea...

Read More »

Some Links

My intrepid Mercatus Center colleague Veronique de Rugy again makes the case for abolishing that great geyser of cronyism, the U.S. Export-Import Bank. A slice: The lack of impact of the Ex-Im Bank on exports shouldn’t be surprising given that even in FY2012 – the year in which it provided more aid than in any other – the Ex-Im Bank’s aid represented 2.31 percent of the value of all goods the US exported. (Note that the Bank has never subsidized exports of services.)  Or to put it...

Read More »

Some Links

Writing in the Washington Post, Cathy Young argues that Progressives are pouring fuel on the fire that is currently engulfing genuine liberalism. A slice: With its utopian quest for a society cleansed of all traces of bias or inequality and its politicization of everything from art to family life, social-justice leftism is in some ways the modern heir to 20th-century communism. While it does not command totalitarian regimes, its effect on Western liberal institutions — especially the...

Read More »

Peter Schiff: Nobody Is Going to Buy the Fed’s BS the Next Time Around

During its FOMC meeting last week, the Federal Reserve took 2019 rate cuts completely off the table. It said it will freeze bond sales from its $3.8 trillion balance sheet later this autumn. In other words, balance sheet normalization is pretty much a done deal. Peter Schiff has predicted this would happen. He said from the beginning if and when the Fed tried to normalize rate, it would have to abort the process.And here we are.But as Peter explained in his most recent podcast, the Fed...

Read More »

Inspector Clouseau is looking for clues

Over the past 4 years, the Fed has adjusted its policy instrument a total of nine times. In each of those nine cases, the Fed funds target was increased by 1/4%. In each of those nine cases the reason for the increase was identical. All nine increases were done with the goal of reducing inflation—holding inflation down to 2%. That’s it. Period.  End of story. And now there is a great mystery that needs to be solved. Why is inflation running slightly below the Fed’s 2%...

Read More »