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David Beckworth just sent me a new paper - Inflation Targeting: A Monetary Policy Regime Whose Time Has Come and Gone - he has written on why it is time to say goodbye to inflation targeting.
On 3 July the Swedish central bank, Riksbanken, cut its key policy rate by 50bp to 0.25%. Most analysts - and the markets - were taken by surprise by this decision. It was particularly surprising as Riksbanken’s governor Stefan Ingves had been voted down by a majority of Riksbanken's board.
Today is the day. July 3 2014. Robert Hetzel is turning 70 today. Happy birthday Bob! I hope you will have a great day with your wife Mary and the rest of your family.
In a very surprising move the Swedish Riksbank this morning cut its key policy rate by 50bp to 0.25%. It was about time! The Riksbank has for a very long time undershot its 2% inflation target and inflation expectations have consistently been below 2% for a long time as well.
Apparently monetary theory is not sexy - or at least when I write about something else than monetary issues then I get more comments and activity on my blog than when I focus on what I really care about (monetary policy as you know...)
These days central bankers seem more concerned about "financial stability" than ever before - and even more concerned about financial stability than nominal stability. These things go in cycles. After 1929 central bankers became terribly concerned about financial stability. Then again in the 1990s after the Mexican crisis in 1994 and the Asian crisis in 1997 and then after the bursting of the "IT bubble" in 2001.
This morning I had the pleasure of doing a presentation on "Milton Friedman, Market Monetarism and the Great Recession" (and a bit on internet-Austrians) for a group of clever young students at the CEPOS Akademi in Copenhagen. CEPOS Akademi is essentially the Danish Free Market think tank CEPOS's summer university.
My blog is mostly about monetary policy matters. However, if I one day would stop writing about monetary policy I think there are two other topics I would focus on. The one is on the need to end the global war on drugs and the second is immigration reform.
Anybody who follow my blog will know that I am not a great fan of the gold standard or any other form of fixed exchange rate policy. However, I am a great fan of policy rules that reduce monetary policy discretion to an absolute minimum.