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Bill "the new Gipper" Woolsey's interesting idea

Bill "the new Gipper" Woolsey's interesting idea

Fellow Market Montarist Bill Woolsey has an interesting proposal. He suggests that the Federal Reserve should adopt a policy of targeting "growth rates of nominal GDP from Reagan's 1983 and 1984 recovery from the recession of 1982". Bill can hardly be said to be an inflationist as he is in fact is in favour of a long-term target of 3% yearly NGDP growth in the US (that would likely lead to 0-1% inflation over the longer run), but he nonetheless favours returning US NGDP to the pre-crisis trend through more aggressive easing in a transitory period.

If you want to know about the Great Recession read Robert Hetzel

If you want to know about the Great Recession read Robert Hetzel

For readers who are unfamiliar with Market Monetarism I have a number of pieces of research that I would recommend, but everybody should start out by reading Robert Hetzel’s excellent and truly thought provoking paper “Monetary Policy in the 2008--2009 Recession”

Sumner explains the difference between "old-style" monetarism and Market Monetarism:

Sumner explains the difference between "old-style" monetarism and Market Monetarism:

Scott Sumner in an answer to me on his blog explains the difference between "old-style" monetarism and Market Monetarism:

France caused the Great Depression – who caused the Great Recession?

France caused the Great Depression – who caused the Great Recession?

One of my absolute favourite Working Papers is Douglas Irwin’s brilliant paper “Did France cause the Great Depression?”.

Risk off and monetary conditions

Risk off and monetary conditions

If one reads through the financial media on a random day it is likely that market participants will be quoted for saying that it is either a “risk on” or a “risk off” day in the markets. (Today surely looks like a risk off day, but that’s is irrelevant to the discussion below).

The youtube version of Market Monetarism

The youtube version of Market Monetarism

One way to study the reasons and the background for the Great Recession is to read Market Monetarist blogs. Another way is to read some quality economic research in economic journals and working papers.

Four reasons why central bankers ignore Scott Sumner’s good advice

Four reasons why central bankers ignore Scott Sumner’s good advice

Scott Sumner and other Market Monetarists forcefully argue that monetary policy can and should be used to return nominal GDP (NGDP) to it's pre-crisis growth path. In the US that is around 5% yearly NGDP growth from a level 12-14% above the present level.

Welcome to The Market Monetarist

Welcome to The Market Monetarist

Since the outbreak of the Great Recession a new economic school has emerged basically as a result of blogging on the internet. I have in a recent working paper termed this school Market Monetarism. The purpose of this blog is to follow the theoretical and empirical development of Market Monetarism as well as hopefully contribute to the development of the school.

Draghi's answer: More public investments in the "digital economy" rather than QE

Draghi's answer: More public investments in the "digital economy" rather than QE

This is ECB-chief Mario Draghi in an interview today with Bloomberg:

Time to get monetary policy on 'autopilot'

Time to get monetary policy on 'autopilot'

For somewhat more than a decade I have regularly been watch monetary policy decision from different central banks around the world. Most 'modern' central banks in the world announces changes to monetary policy once around. Mostly these events are pretty much none-events - the central banks do not surprise markets much. However, over the last fives years it has certainly been harder to predict the outcome of these meetings compared to how relatively easy it in the decade before the crisis.

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