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Jens Weidmann, do you remember the second pillar?

Jens Weidmann, do you remember the second pillar?

Today the ECB is very eager to stress it's 2% inflation target. However, a couple of years ago the ECB in fact had two targets - the so-called two pillars of monetary policy. The one was the inflation target and the other was a money supply target - the so-called reference value for the growth rate of M3.

Hear, hear!! Beckworth's and Ponnuru's call for monetary regime change

Hear, hear!! Beckworth's and Ponnuru's call for monetary regime change

When you are blogging you will often find yourself quote other bloggers and commentators. Mostly just four or fives lines. However, this time around I am not going to quote anything from David Beckworth's and Ramesh's latest article in National Review. So why is that? Well, I simply agrees strongly with EVERYTHING the two gentlemen write in their article and I can't quote the whole thing. It is simply an excellent piece on why the Federal Reserve and the ECB should switch to NGDP level targeting. If this will not convince you nothing will.

Dude, here is your model

Dude, here is your model

Here is Scott Sumner:

Who did most for the US stock market? FDR or Bernanke?

Who did most for the US stock market? FDR or Bernanke?

My post on US stock markets and monetary disorder led to some friendly but challenging comments from Diego Espinosa. Diego rightly notes that Market Monetarists including myself praises US president Roosevelt for taking the US off the gold standard and that similar decisive actions is needed today, but at the same time is critical of Ben Bernanke’s performance of Federal Reserve governor despite the fact that US share prices have performed fairly well over the last four years.

Tight money = low yields  - also during the Great Recession

Tight money = low yields - also during the Great Recession

Anybody who ever read anything Milton Friedman said about monetary policy should know that low interest rates and bond yields mean that monetary policy is tight rather than easy. And when bond yields drop it is normally a sign that monetary policy is becoming tighter rather than easier.

Monetary disorder - not animal spirits - caused the Great Recession

Monetary disorder - not animal spirits - caused the Great Recession

If one follows the financial media on a daily basis as I do there is ample room to get both depressed and frustrated over the coverage of the financial markets. Often market movements are described as being very irrational and the description of what is happening in the markets is often based on an "understanding" of economic agents as somebody who have huge mood swings due to what Keynes termed animal spirits.

Is Matthew Yglesias now fully converted to Market Monetarism?

Is Matthew Yglesias now fully converted to Market Monetarism?

The always interesting Matthew Yglesias comments on my point that we should stop talking about national accounting standards. In the process Matt is having a bit of fun with two identities.

The cheapest and most effective firewall in the world

The cheapest and most effective firewall in the world

While the European crisis has escalated ECB officials have continued to stress that the ECB’s mandate is to ensure inflation below, but close to, 2%.

David Cameron on the euro crisis

David Cameron on the euro crisis

This is British Prime Minister David Cameron on the euro crisis:

The discretionary decision to introduce rules

The discretionary decision to introduce rules

At the core of Market Monetarists thinking is that monetary policy should be conducted within a clearly rule based framework. However, as Market Monetarists we are facing a dilemma. The rules or rather quasi-rules that is presently being followed by the major central banks in the world are in our view the wrong rules. We are advocating NGDP level targeting, while most of the major central banks in the world are instead inflation targeters.

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