This is one of the things I will be discussing at the Berlin Conference:
Comparing the 1982 Bull Market with the 2009 Rally>
Rally Comparison 1982 2009 P/E Multiple 8X 26X Dividend Yields 6% below 2% Book Value Discount to Book 2X Premium Monetary Policy Reducing money growth and inflation rates Creating money growth and inflation rates Fiscal Policy Aimed [...]One of my teachers, Kevin Grier, voices concerns with the monetary policies that quantitative easing implies --- including the Fed's ability to credibly commit to the monetary policy rules advocated. As Kevin says in the comments: "The idea that too tight of monetary policy led to or worsened [...]
Officials blind to the scope of the unemployment problem
IN THE last week, the internet has filled with examinations of the problem of a jobless recovery and what can be done to address it. In particular, there has been an ongoing debate over how effective monetary policy has been [...]
Brother Joseph Gagnon makes a few points:
The Liquidity Trap Does Not Make Monetary Policy Ineffective: With short-term risk-free interest rates essentially at zero in the major developed economies, conventional monetary policy is in a liquidity trap. As a number of commentators have observed, printing zero-interest-rate money to buy [...]
Rep. Ron Paul's "Audit the Fed" bill has been back in the national conversation the past week with news of an amendment offered by North Carolina Rep. Mel Watt (D). The Ron Paul amendment would have the GAO audit Fed monetary policy decisions, including the recent expansion of the Fed [...]
By Joseph E. Gagnon
Today, we're fortunate to have Joe Gagnon, senior fellow at the Peterson Institute for International Economics, as a guest contributor.
' [...]This week’s EconTalk is Scott Sumner on monetary policy. Sumner argues that monetary policy was too restrictive in late 2008 and turned a mild recession into a doozy. I don’t agree yet but that argument and his whole perspective is very interesting.
Scott Sumner argues that nominal interest rates are near zero because monetary policy (specifically expected future monetary policy) is too tight. He argues that tight (expected future) monetary policy makes expected inflation low, which makes nominal rates low. He also argues that tight (expected future) monetary policy makes real [...]
|Peter Boettke|
Paul Krugman provides his take on the Beckworth graph showing the collapse of nominal spending and relates it to his 1998 work on Japan. The upshot, monetary policy will not produce the desired effect in our current situation. Scott Sumner responds and continues to push his position [...]
And why some inflation sure would be helpful
ALEX TABARROK says that this chart, from David Beckworth, "sums up a lot of recent economic history".Mr Beckworth is suggesting that nominal spending be considered an indicator of the tightness, or looseness, of monetary policy. So for instance, the poor state [...]
I featured in a Lateline Business story last night on Reserve Bank media backgrounding in relation to monetary policy. Lateline Business supervising producer Richard Lindell deserves considerable credit for pursuing this story in the face of both official and unofficial stonewalling. Credit is also due to [...]
Earlier I wrote a post on the gutting of Rep. Ron Paul's bill to audit the Federal Reserve. In honor of Reason's Radicals for Capitalism spotlight on Ayn Rand this week, allow me to expand on the topic of monetary policy by using the words of a member [...]
Both central banks and commercial banks issue liabilities that function as media of exchange. Why do we say that it is central banks, rather than commercial banks, that determine monetary policy; setting interest rates in the short run, and inflation in the long run? What makes a bank a central [...]
Last week I participated in a conference hosted by the Federal Reserve Bank of Boston, at which I discussed the new lending programs and asset acquisitions pursued by the Federal Reserve over the last two years. Previously I shared with Econbrowser readers empirical evidence on the effects these [...]
Why does the Loonie appreciate when the Bank of Canada tightens monetary policy (relative to what was expected)? And depreciate when the Bank loosens monetary policy (relative to what was expected)?
Before you conclude I've lost it, by asking such an easy question, consider the following weird thought-experiment.
Suppose that one night, [...]
Bernanke talks nothing about monetary policy and keeps his speech focused on Asia and our trade relationship with them. His bottom line, the US needs to save more, Asia needs to consume more and this would rebalance trade imbalances. Of course with US interest rates at zero, savings in the [...]
It is clear that a gap has opened between the RBA’s view of Australia’s economic prospects and that of the Federal Government and its Treasury Department. The Reserve Bank Board is winding back its “emergency” monetary policy, but the Treasury sees no need for winding back the emergency fiscal policy [...]
