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Mark Carney comes close to endorsing NGDP level targeting

Mark Carney comes close to endorsing NGDP level targeting

Here is Mark Carney present governor of Bank of Canada and the next governor of Bank of England:

Imagine the FOMC had listened to Al Broaddus in 2003

Imagine the FOMC had listened to Al Broaddus in 2003

In my recent post on how the central banks of Australia, Poland and Sweden should have a look at Bennett McCallum's MC rule I briefly mentioned how Richmond fed president Al Broaddus already back in 2003 warned that the Federal Reserve should have a plan for how to conduct monetary policy at the the "Zero Lower Bound". It was of course Bob Hetzel's brilliant book on the Great Recession that inspired me. In his book Bob quotes Broaddus' comments at the June 24-25 2003 FOMC meeting.

Sweden, Poland and Australia should have a look at McCallum’s MC rule

Sweden, Poland and Australia should have a look at McCallum’s MC rule

Sweden, Poland and Australia all managed the shock from the outbreak of Great Recession quite well and all three countries recovered relatively fast from the initial shock. That meant that nominal GDP nearly was brought back to the pre-crisis trend in all three countries and as a result financial distress and debt problems were to a large extent avoided.

Was the Geyser crisis caused by a negative supply shock?

Was the Geyser crisis caused by a negative supply shock?

I am writing this while having a small break between meetings and interviews in Reykjavik. It has been a great day, but also a busy day in Iceland's capital for me. Today's meetings and talks have been educational for me and it had made me think about a lot of issues regarding the Icelandic economy. I always find that meetings "on the ground" educate me about the economies I am analyzing rather than just looking a the numbers.

Reykjavik here I come - so let me tell you about Singapore

Reykjavik here I come - so let me tell you about Singapore

As I am writing this I am getting ready to fly to Iceland. Iceland is a country that have had massive impact on my thinking and on my professional life over the last 6 years so it is always with a bit of a special feeling when I fly to Iceland.

Duncan and Coyne on "The Overlooked Costs of the Permanent War Economy"

Duncan and Coyne on "The Overlooked Costs of the Permanent War Economy"

I hope my loyal readers will forgive me for going a bit overboard on the fact that I think cuts in US defense spending will do the US economy well, but you have to read Thomas K. Duncan and Christopher J. Coyne's new paper on "The Overlooked Costs of the Permanent War Economy". Here is the abstract:

Cato Institute on US military spending and the fiscal cliff

Cato Institute on US military spending and the fiscal cliff

In an earlier post I claimed that the "full" fiscal cliff would not necessarily be a disaster for the US economy - and I was probably also unusual forthcoming in my hope that US defending might be cut as a result of the fiscal cliff, but this blog is primarily about monetary policy issues so I don't want to bore my readers with more of my views on the US defense budget. Instead I would like to recommend my readers to have a look at what the Cato Institute has to say on this issue.

H. L. Mencken comments on the ECB

H. L. Mencken comments on the ECB

I just found this wonderful quote from the American journalist and freethinker Henry Louie Mencken on "Puritanism" ("A Mencken Chrestomathy" (1949):

Beckworth and Sumner - testimony on Capital Hill

Beckworth and Sumner - testimony on Capital Hill

Have a look at our two friends David Beckworth and Scott Sumner talking in Washington DC - see here.

Time for a comeback to the SOMC - but it should be a monetarist SOMC and not an Austrian SOMC

Time for a comeback to the SOMC - but it should be a monetarist SOMC and not an Austrian SOMC

I have always been a huge fan of the Shadow Open Market Committee (SOMC). However, it is having a much less prominent role in US monetary policy debate today than used to be the case in the good old days. A reason is that the SOMC played a very important role in as a counterweight to the Federal Open Market Committee when the Federal Reserve really did a bad job back in the 1970s. However, during most of the Volcker-Greenspan period the conduct of monetary policy in the US became much closer to what was being advocated by the SOMC members. That led to the SOMC to becoming less interesting as constant critique of the Federal Reserve and the SOMC star therefore faded somewhat both in the media and in academia.

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