Blog Archives

WHAT WE'VE LEARNED FROM ALLAN MELTZER

11/30/2017

What We Can Learn From Allan Meltzer
featuring Allan H. Meltzer via E21
As the lingering effects of the Great Recession of 2007-09 continue to fade away, Federal Reserve officials now face the challenge of designing and implementing new monetary policy strategies to replace and improve upon those adopted under duress during the financial crisis and the unexpectedly long period of zero short-term interest rates that followed.

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8 HERESIES OF MONETARY POLICY

11/30/2017

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Eight Heresies Of Monetary Policy
by John H. Cochrane via Grumpy Economist
This is a talk I gave for Hoover, which blog readers might enjoy. Yes, it puts together many pieces said before. This post has graphs and uses mathjax for equations, so if it isn't showing come back to the original.

Evidence-Based Policy Mistakes
Kaushik Basu argues that too many political leaders are drawing the wrong conclusions from the data.

Four Heresies Of Monetary Policy
by John H. Cochrane via Defining Ideas
The Fed is not nearly as powerful as conventional wisdom suggests.

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ECONOMIST'S FIGHT OVER U.S. TAX REFORM LEAD GROWTH

11/30/2017

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Economists Respond To Summers, Furman Over Mnuchin Letter
by Robert J. Barro, Michael J. Boskin, Douglas Holtz-Eakin, R. Glenn Hubbard, Lawrence B. Lindsey, Harvey S. Rosen, George P. Shultz, John B. Taylor via The Washington Post
Dear Lawrence Summers and Jason Furman, We read with interest your Dear Colleague letter in The Washington Post in response to ours in the Wall Street Journal. You ask if we have considered several points you make. The answer is yes — we have considered each before coming to our conclusion.

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JOHN B. TAYLOR ON INFLATION TARGETS

11/29/2017

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Inflation Target, Taylor Rule And Gold
quoting John B. Taylor via Investing
The central banks’ inability to achieve their inflation targets led some analysts to argue for modifying these targets. Are they inappropriate in a modern, globalized economy? Should central banks change them? Or should they conduct a more rule-based policy, as John Taylor argues? How would such moves affect the gold market?

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AFTER THE GIG ECONOMY GOES BUST; HOW EMERGING ECONOMIES CAN TEACH OTHER ABOUT GROWTH

11/26/2017

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PROJECT SYNDICATE

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A GLOBAL PHILLIPS CURVE? HOW TO UNDERSTAND INTERNATIONAL POLITICAL ECONOMY

11/7/2017

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THE "NO INFLATION" PUZZLE

Global economic analysis: The Phillips Curve – the supposed trade-off between unemployment and inflation — has gone unobserved for a disturbingly long period of time, David P Goldman writes. The Federal Reserve, the European Central Bank and the Bank of Japan set a 2% inflation rate as the goal of quantitative easing. According to the Phillips Curve model, 4.1% unemployment in the US (the lowest since 1969), and 5.7% in Germany, the lowest on record, should produce inflation. If labor supplies are scarce, the cost of labor is supposed to rise, and prices are supposed to go up. Except they don’t. In fact, we rarely see much of a relationship between inflation and unemployment, except in periods of severe recession, where prices fall and unemployment rises. These are brief episodes, though; there are others during which inflation and unemployment fall together. The past sixty years of data show no relationship at all. READ THE STORY HERE

THERE'S NOTHING CONSERVATIVE ABOUT A HAWKISH MONETARY POLICY

What unit labor costs are telling us
BY DAVID P. GOLDMAN
Phillips Curve in reverse?

Fed's Monetary Policy Cornerstone Attacked At Economists' Gathering
quoting Robert E. Hall, Milton Friedman via Bloomberg
Milton Friedman put a nail in the coffin of the original version of the Phillips Curve 50 years ago when he correctly foresaw that the U.S. could simultaneously suffer from high unemployment and lofty inflation. A growing number of economists are now trying to lay to rest Phillips Curve 2.0, still in use at the Federal Reserve and other central banks to guide monetary policy.

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