quoting Charles I. Plosser via National Review
Not so long ago, during the age of Milton Friedman, the chief concern of monetary policy was inflation. The Federal Reserve’s job was seen as a balancing act: Too low a money supply would slow spending, and too much would erode purchasing power. Of course, given the inoculation of monetary economists against anything resembling deflation, we really only worried about erring in the other direction. Good monetary policy meant open-market operations to keep the money supply on a predictable path, which gives markets a stable foundation for short-term and long-term contracting, facilitating economic coordination.
Frederick W. Kagan | The Hill
Michael R. Strain | Bloomberg Opinion
Prices rising faster than the Federal Reserve’s 2 percent target would be welcome, but too much price growth could be a problem. If that happens, the Federal Reserve could be in a bind.
Allison Schrager, E21
The 10-year breakeven inflation rate returned to its 2018 level this week. The 10-year breakeven is the difference between the 10-year nominal and 10-year inflation-linked bond, it is a measure of what the market thinks inflation will be in several years. The higher rate could mean people may think inflation will return soon. Read more here....
Nolan Gray, City Journal
A Physicist Claims Everything About Modern Economic Theory Is Wrong
Brandon Kochkodin, Bloomberg
How to Fix American Capitalism
Edward Glaeser, City Journal
by Josef Joffe via Project Syndicate
Germany's Christian Democrats are poised to choose a new party leader, and that person is almost certain to replace Chancellor Angela Merkel when she steps down in September 2021. All three contenders must somehow distinguish themselves from their rivals while boldly campaigning for continuity.
by Soner Cagaptay via The Caravan
A key foreign policy challenge for President-elect Joe Biden is going to be getting along with Turkey’s president Recep Tayyip Erdogan and managing Washington’s ties with Ankara. To this end, Biden needs to understand the dynamics and fears that inform the decisions of Erdogan, Turkey’s powerful president, including the latter’s view of Russian president Vladimir Putin.
Derek Scissors | AEIdeas
Hal Brands | Bloomberg Opinion
What you need to know: "The attacks are among the deadliest in Niger and come on the heels of several others, including one by the Islamic State West Africa Province in the Diffa region a few weeks ago in which dozens of people were killed. While no group has claimed responsibility for the attack, Islamic State in the Greater Sahara has increasingly staged assaults in this region." More here.
Karen E. Young | Al-Monitor