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BoJ might become the first central bank in the world to introduce NGDP targeting
The fiscal cliff is good news

The fiscal cliff is good news

When I started this blog I set out to write about monetary policy issues – primarily from a none-US perspective – and furthermore I am on vacation with my family in Malaysia so writing this blog post goes against everything I should do – however, after listen to five minutes of debate about the ”fiscal cliff” on CNBC tonight I simply have to write this: What is your problem? Why are you so scared about fiscal consolidation? After all this is what the fiscal cliff is – a 4-5% improvement of public finances as share of GDP.

Argentina's hidden inflation - another case of the horrors of price controls

Argentina's hidden inflation - another case of the horrors of price controls

In my previous post I discussed how price controls likely have created a wedge between inflation measured by CPI and by the GDP deflator in Malaysia. That made me think - can we find other examples of this in the world? And sure thing the story of Argentina's inflation over the last decade seem to be more or less the same thing.

Malaysia should peg the renggit to the price of rubber and natural gas

Malaysia should peg the renggit to the price of rubber and natural gas

The Christensen family arrived in Malaysia yesterday. It is vacation time! So since I am in Malaysia I was thinking I would write a small piece on Malaysian monetary policy, but frankly speaking I don't know much about the Malaysian economy and I do not follow it on a daily basis. So my account of how the Malaysian economy is at best going to be a second hand account.

Guest post: Thoughts on Policy Uncertainty (Alex Salter)

Guest post: Thoughts on Policy Uncertainty (Alex Salter)

Even though I think the primary economic problem in the US and in Europe at the moment is weak aggregate demand due to overly tight monetary policy I certainly do not deny the fact that both the US and the euro zone face other very significant problems. Among these problems are considerable "regime uncertainty". In fact I believe that regime uncertainty is the key economic problem in a number of countries such as Venezuela, Argentina and Hungary. I have in earlier posts (see links below) argued that regime uncertainty primarily should be seen as supply side phenomena. However, regime uncertainty can also be seen as a demand side problem.

Patri Friedman on Market Monetarism

Patri Friedman on Market Monetarism

Here is Patri Friedman on his blog "Patri's Peripatetic Peregrinations":

The ECB is turning into the BoJ

The ECB is turning into the BoJ

This is ECB Chief Mario Draghi:

China is now targeting 9% NGDP growth

China is now targeting 9% NGDP growth

Did I get your attention? No China has not announced an NGDP level targeting regime, but did so in an indirect fashion. Let me explain why. The clever French economist Nicolas Goetzmann pointed me to this quote on ft.com:

Bob Murphy on the failure of price regulation

Bob Murphy on the failure of price regulation

Bob Murphy has an excellent Youtube comment on the failure of government price regulation and why that has caused Gas line in the US after the Hurricane Sandy. Have a look - Bob explains well why government is likely to do more harm than good by regulating prices rather than letting the price mechanism work freely.

I just looked at the NGDP growth rate of 143 countries

I just looked at the NGDP growth rate of 143 countries

Xavier Sala-I-Martin once wrote a paper called "I just ran two million regressions". I can't do quite as good, but I nonetheless have had a look at the nominal GDP growth of 143 countries since 1990. My "project" is to see whether there is a correlation between the growth rate of NGDP and the volatility of NGDP. We know from inflation history that there is a pretty close positive correlation between higher inflation and higher volatility in inflation. My expectation was that that would also be the case for NGDP and NGDP volatility (measured as the standard deviation of yearly NGDP growth across 143 different countries).

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