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In 2009 Scott Sumner wrote an article – The Real Problem was Nominal – in which he explained – was later became known as the Market Monetarist explanation for the causes of Great Recession.
It is no secret that I am quite fascinated by the the idea that social media data might be very useful as early/leading indicators of macroeconomic variables. Said in another way I think that social media activity can be seen as a form of prediction markets.
Some have recently suggested that Ted Cruz has been inspired by Market Monetarist thinking. I have no clue about that, but at least it seems like Cruz understands now that the Great Recession - as the Great Depression - was caused by too tight monetary policy.
Frankly speaking I don't feel like commenting much on the FOMC's decision today to keep the Fed fund target unchanged - it was as expected, but sadly it is very clear that the Fed has not given up the 1970s style focus on the Phillips curve and on the US labour market rather than focusing on monetary and market indicators. That is just plain depressing.
The Arab Spring started in 2010-11 in Tunisia and until now Tunisia has been highlighted as basically the only country, where the Arab Spring has not ended in disaster. Unfortunately over the last couple of days social unrest and violent confrontation between demonstrators and police have erupted across Tunisia.
My friend the great economic historian Clark Johnson has written a review of Scott Sumner's new book The Midas Paradox.
The commodity currencies of the world continues to take a beating on the back of the sharp drop in oil prices. This is now causing some to fear "currency instability". Just these this story from Canada's Financial Post:
The global stock markets are taking yet another beating today and as I am writing this S&P500 is down nearly 3.5% and the latest round of US macroeconomic data shows relatively sharp slowdown in the US economic activity and more and more commentators and market participants are now openly taking about the risk of a US recession in the coming quarters.