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Really good links - Milton Friedman - Tax cuts - Backloaded deficit reduction...
David Beckworth and William Ruger - What would Milton Friedman say? - "Had he been alive, Friedman would have been shocked to see the Fed in late 2008 and early 2009 allow nominal income, as measured...
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Really good links - Monetary policy and asset bubbles - Yuan and IMF -...
Adam Posen - Monetary policy and global rebalancing - "Japan’s extended economic stagnation since its stock market peaked on December 29, 1989, has prompted a series of investigations, recommendations,...
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Really good links - Fiscal multipliers - Bond bubble - Soprano Fed - Poker...
Ethan Ilzetzki, Enrique Mendoza, and Carlos Vegh (via Tyler Cowen) - Fiscal multipliers - "Based on a novel quarterly dataset of government expenditure in 44 countries, we find that (i) the output...
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Really good links - Successful QE - What would Milton Friedman say? - QE for...
David Beckworth - Successful QE in 1934 - "QE has been done before in the United States and it worked incredibly well. It was initiated in early 1934 when FDR and his treasury officials decided to (1)...
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Really good links - QE2 - Scott Sumner - Milton Friedman - Voter turnout -...
Brad DeLong - QE2 - "The five-year note carries an interest rate of 1.17% per year. The Federal Reserve is thus changing the supply of assets by taking onto its own balance sheet... wait for it... wait...
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Really good links - Kocherlakota and bubbles - Capping the climate change -...
Narayana Kocherlakota, President, Federal Reserve Bank of Minneapolis - Housing bubbles, credit bubbles and government bond bubbles - "Insufficiently stringent bank regulation may have relatively...
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Really good links - Kocherlakota: helping the victims of real estate bubble...
Narayana Kocherlakota, President, Federal Reserve Bank of Minneapolis - Government should recreate the distribution of wealth that existed before the housing bubble crashed - "Amore feasible option...
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Collapse of the Fed Funds Rate Peg and the Great Recession
The causes of the Great Repression are still a matter of active debate among economists, and Scott Sumner, in a post directed at me, says "the interest on reserve policy was a huge mistake, comparable...
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Really good links - QE2 as a signal - Gold and monetary policy - QEII - EMH -...
Menzie Chinn - QE2 as a signal - "There is some mystery why the impact on the exchange rate has been so much more marked than that on long term rates. As several observers have observed, QE2 is fairly...
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Really good links - Too little money chasing too many goods - Credit Easing -...
Bill Woolsey - Recession - "Recession is NOT too little money chasing too many goods. It is too little money chasing too few goods."Ben Bernanke, please bring credit easing back! Here is what...
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Really good links - Deleveraging - Bernanke and tax cuts - Pain caucus -...
Paul Krugman - Deleveraging - "The situation: over the past decade, households ran up what is almost universally regarded as an excessive amount of debt — shown here for the United States, but also in...
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Really good links - Sovereign default - Brad DeLong and Larry Summers - No...
Simon Johnson and Peter Boone - Sovereign default - "The Germans should recall the last episode of widespread sovereign default – Latin America in the 1970’s. That experience showed that countries...
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Really good links - Case against the Fed - Fiscal democracy - IOR - Bernanke...
Tyler Cowen - The case against the Fed is weak - "To whatever extent we can do without a Fed, it's because there are so many Treasury securities, which should be a sobering thought to a market-oriented...
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Really good links - Uncertainty and AD - Cash is the king - Interest on...
Brad DeLong - Uncertainty and aggregate demand - "The future is always uncertain--and how uncertain it is fluctuates. When the future is more than unusually uncertain, economic players want the...
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Ireland - Greece - Fiscal vs. monetary policy - Eurozone - Overconsumption...
Barry Eichengreen - Ireland - "The Irish “program” solves exactly nothing – it simply kicks the can down the road. A public debt that will now top out at around 130 per cent of GDP has not been reduced...
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Payroll tax holiday and the credit channel
Bryan Caplan says Obama has botched the payroll tax holiday:"If you cut a tax on employers, this reduces labor costs, increases the quantity of labor demanded, and reduces surplus labor. If you cut a...
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Really good links - Global AD - Austrian theory - Germany - A sentence to ponder
Bill Gross - Global aggregate demand - "The global economy is suffering from a lack of aggregate demand. In simple English that means that consumers are not buying enough things and that companies are...
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Really good links - Optimism about US recovery - Bailout - What is money? -...
Nick Rowe - Optimism about US recovery - "What matters is the gap between what the market believes will happen and what the market believes the Fed believes will happen. I think we have just such a gap...
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Monetary policy and Minsky cycles
1. It is impossible to understand the Great Recession without invoking Minsky's cycle theory.2. Minsky cycle creates the least damage if Minsky recession takes place in the context of stable NGDP...
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Really good links - Nominal GDP targeting - Shadow banking - Milton...
David Beckworth - The case for nominal GDP targeting - "Mark Thoma wants to hear the case for nominal GDP targeting. This approach to monetary policy requires the Fed stabilize the growth path for...
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