I just bought two wonderful diecast models of cars that were not only way ahead of their times, but they also show how automobiles should be instead of the rolling bluetooth-connected refigerators that we drive today. The 1956 Packard Caribbean and the 1957 Cadillac Eldorado had powered windows, powered seats with memory buttons, a/c, and […]
Pursuing a career is nice, but also has some drawbacks. One of them is that I write much less often on my blog now and that I will have to change the characteristic of this blog. I already do economics stuff for a living now, and, as my economically skilled readers know, a price for […]
The ECB cannot undo what decades of European profligacy have done, but it certainly can stop do make things worse than they already are. Read Ambrose Evans-Pritchard to see why.
Usually people in the financial industry and financial media rejoice when interest rates rise (Exhibit A), because it means that expected growth rises, which, simply put, means better business. Yet the Federal Reserve tried to lower long-term interest rates with Operation Twist, after they have successfully held down short-term rates at Zero for three years […]
Marcus Nunes wrote this excellent analysis of why NGDP Targeting works better than the well-established Inflation Targeting. To put it in layman’s terms, inflation targeting over-stimulates booms and does not react strong enough to downturns. This is because it focuses only on price inflation, not on output growth. The Federal Reserve has a so-called “dual […]
I would like to clarify for all non-economists out there what NGDP Targeting is really about. This article from ZeroHedge claims that NGDP Targeting is synonymous with issuing new debt and inflating old debt away. In fact, issuing debt has nothing to do with it. NGDP Targeting would establish a reliable rate of nominal economic […]
So, support for NGDP targeting finally seems to grow. It wouldn’t solve the basic problem that we (the Western world) suffer from too much regulation, a stricken financial system, and too much debt. So I wouldn’t bet on NGDP targeting increasing long-term growth or lowering long-term unemployment rates much. But it could surely help us […]