ALL BLOG POSTS
This is what I just told Ambrose Evans-Pritchard at the Telegraph:
Emerging Markets are once again back in the headlines in the global financial media – from Turkey to Argentina market volatility has spiked from the beginning of the year.
When I have written about monetary policy in Argentina I rarely have had anything positive to say. However, today I will have to say that the Argentine central bank made a sensible decision - even though it mostly looks like a coincidence.
John Maynard Keynes famously titled his magnus opus from 1936 The General Theory of Employment, Interest and Money. However, General Theory, as it is generally known, is nothing of the kind. It is not a General Theory of macroeconomics – rather it is a specific theory of macroeconomics making very specific assumptions about the workings of the economy and I will argue here that Keynes made very specific assumptions particularly about the monetary policy regime or rule under which the economy operates.
My friend Sam Bowman, Research Director at the Adam Smith Institute, has written a letter to the Financial Times calling for the introduction of a nominal spending target in the euro zone. This is from Sam's letter:
This is CNBC's legendary Larry Kudlow in a comment to my previous post:
The "normal" story of the Great Recession is that the crisis was caused by the bursting of a giant property market bubble in the US and other places. The normal story is an odd synthesis between a old-school Keynesian animal spirits story and a vulgar version of Austrian business cycle theory.
Inflation is skyrocketing in Argentina and the country seems unable to ever maintaining any form of nominal stability. In my view the problem with lack of nominal stability in Argentina is, however, not fundamentally monetary - it is rather a constitutional problem. Hence, it seems like the country's politicians are able to make the decisions that are necessary to maintain monetary stability.
Adam Tooze is one of my favorite historians and I have often written about his fantastic book Wages of Destruction. It is an amazing book about the Nazi time German economy, which I strongly recommend to anybody who cares about listening to me.