The New York Times asks ten economists about the risks of “overheating.” I don’t go along with the mainstream macro paradigm, but several of the responses resonated with me, especially Olivier Blanchard’s. I shall plead Knightian uncertainty. I have no … Continue reading →
Tag: Monetary Economics
Kling Monetary Theory
In one sentence, KMT says, There is no scarcity in the means of payment. Textbooks used to say that money is a unit of account, a store of value, and a means of payment. The textbook justification for money is … Continue reading →
The recent evolution of central banking in the U.S.
Timothy Taylor writes, when I was teaching big classes in the late 1980s and into the 1990s, the textbooks all discussed three tools for conducting monetary policy: open market operations, changing the reserve requirement, or changing the discount rate. Somewhat … Continue reading →
Q&A on my inflation views
For context, read Tyler (and Scott S.) vs. me on inflation. 1. What if the Fed chairperson explained monetary dominance out loud? That would mean telling Republicans that tax cuts don’t stimulate and telling Democrats that more government spending doesn’t … Continue reading →
Tyler (and Scott S.) vs. me on inflation
Tyler Cowen writes, To see why the huge increase in bank reserves did not result in inflation, consider that there has been a considerable decrease in U.S. excess bank reserves over the last five years. No one claims that this … Continue reading →
Trends in academic economics
I discuss them with Sebastian Stodolak. He asked interesting questions, and I sometimes gave interesting answers. A 20-minute podcast.
My intellectual influences, part 3: 1980-1986
From 1980-1986 I was an economist at the Fed. I started in Financial Research (a section focused on the banking industry), then went to Mortgage and Consumer Finance (the section that dealt with housing), then to National Income (the section … Continue reading →
Deficits and inflation: a longer historical overview
Michael Bordo and Mickey D. Levy write, the initial response combined aspects of the policy response in several overlapping crisis scenarios in the past: World Wars I and II, the Great Depression, and the Global Financial Crisis (Bordo, Levin and … Continue reading →
Dependency ratios and inflation
In a podcast with Rob Johnson of George Soros’ Institute for New Economic Thinking, Charles Goodhart and Manoj Pradhan offer an unusual explanation for secular trends in inflation. They say that a decline in the dependency ratio creates excess supply … Continue reading →
Finance theory and the Fed
Eugene Fama says, Actually, the central banks don’t do anything real. They are issuing one form of debt to buy another form of debt. If you are an old Modigliani–Miller person the way I am, you think that’s a neutral … Continue reading →
