ALL BLOG POSTS
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.
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).
Most inflation targeting central banks in the world are targeting inflation measured by the Consumer Price Index (CPI). However, if you want to target inflation CPI is probably the worst possible measure to focus on. Why? Because CPI includes both indirect taxes and import prices - something the central bank can certainly not control.
I have always wanted to promote the work of young scholars on this blog and have been grateful that a couple of gifted young economists have published guest posts on this blog. I want to continue that "tradition" and I am therefore happy that Garrett Watson - a student of Steve Horwitz at St. Lawrence University - has accepted my invitation to write a guest post for my blog.
Let me just quote Steve Horwitz's latest Facebook update:
Today I have been in Oslo, Norway for client meetings. The topic on the agenda is Central and Eastern Europe and particularly the investment climate in South Eastern Europe. That gives me reason to discuss a favourite topic of mine – “regime uncertainty – as defined by Robert Higgs - and why the present lacklustre recovery in the US economy is unlikely in anyway to be related to such regime uncertainty.