Clark Johnson has written an article (here for smaller file size) that does a fabulous job addressing cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 six common myths about U.S. monetary policy since 2008. It is accessible but informed and should be required reading for anyone thinking about U.S. monetary policy. I am adding it to my required reading list for my money and banking class. It is really that good.
Here are cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 six myths Johnson addresses:
Myth 1: The Federal Reserve has followed a highly expansionary monetary policy since August, 2008.
Myth 2: Recoveries from recessions triggered by financial crises are necessarily low.
Myth 3: Monetary policy becomes ineffective when short-term interest rates fall close to zero.
Myth 4: The greater cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 indebtedness incurred during growth years, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 larger cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 subsequent need for debt reduction and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 greater cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 downturn.
Myth 5: When money policy breaks down cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re is a plausible case for a fiscal response.
Myth 6: The rising prices of food and ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r commodities are evidence of expansionary policy and inflationary pressure.
David Beckworth--
ReplyDeleteAt cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 risk of sounding presumptuous, I want to ask you this: Have you contacted Fisher, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Dallas Fed president?
As you are brocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r Texans, perhaps he would grant you an audience.
Yes, it is unlikely he would be converted on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 spot, but perhaps he would become a bit less clueless.
You have put togecá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r many compelling arguments. If Fisher was informed it was conservatives who are pushing NGDP, he might become open to it.
Yes, partisan politics trumps everything.
Work with cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r major central banks to engineer an increase in interest rates? What?
ReplyDeleteIt would be interesting to see a central bank saying that it will undertake open market purchases until cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 federal funds rate rises from .25% to 2%. Perhaps Kocherlakota would go for it.
Generally, I would think cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 better approach is to just say that interest rates will do what market forces make cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m do. Any contraint that keeps cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m from falling is likely to be counterproductive in my view.
The way I see it, each agent should think that interest rates will fall "too low" if ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r agents don't believe that prices and/or output will rise. And so, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y will make more expenditures in that scenario. But, if ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r agents do expect output and/or prices to rise, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n output and/or prices will rise, and so, each agent still will make more expenditures.
Saying that we won't let interest rates fall (or we won't let prices rise,) will interfere with getting nominal GDP to rise.
Bill, that was exactly my reaction. It is an excellent paper. In fact it could become a classic, but cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 idea of coordinated global interest rate hike puzzle me quite a bit.
ReplyDeleteSure thing if you allowed cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 market to set interest rates and announce a NGDP rule cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365n pretty soon rates would be higher - because inflation expectations would be higher, but I am not sure that that is what Johnson mean.
I think Johnson was advocating a rise of interest rates but only within cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 context of a vigorous QE program. The rise in interest rates would encourage banks to lend, as opposed to collecting IOR.
ReplyDelete