tag:blogger.com,1999:blog-5713178645208582139.post1448044270222275438..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: The Poisoned Chalice of Macroeconomic PolicyDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5713178645208582139.post-54148554362582765322016-05-14T19:17:40.787-05:002016-05-14T19:17:40.787-05:00David--
You start with the premise that extra dem...David--<br /><br />You start with the premise that extra demand from a chopper drop will result in more inflation. But maybe it will mostly generate velocity and transactions.<br /><br />Remember, inflation barely budged in Texas and The Dakotas during the oil boom and in a seven-year economic recovery.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-44446678261101194192016-05-07T22:14:46.330-05:002016-05-07T22:14:46.330-05:00Anonymous one, I agree nothing in principle preven...Anonymous one, I agree nothing in principle prevents FIT from allowing overshooting. I even mentioned that in the post. The problem is that it is increasingly not being practiced that way. So there is a big disconnect between what the proponents of FIT see and what actually happens when applied. That is why I believe CBs need the 'discipline' of a level target. It will force them to act David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-57825205428394254532016-05-07T15:53:10.524-05:002016-05-07T15:53:10.524-05:00Thanks.Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-14289132474738466442016-05-06T22:54:00.585-05:002016-05-06T22:54:00.585-05:00Well said anonymous.Well said anonymous.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-86591917430042980082016-05-06T14:31:41.782-05:002016-05-06T14:31:41.782-05:00The ECB wasn't practicing flexible inflation t...The ECB wasn't practicing flexible inflation targeting as any of its proponents see it. Nothing in IT says that inflation cannot rise above the target and having inflation approach the target asymptotically, while probably not optimal, is consistent with economic recovery. <br /><br />But the ECB's policy framework has three key flaws. First, the target of "slightly below 2 percentAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-52552066259234719982016-05-02T12:20:57.493-05:002016-05-02T12:20:57.493-05:00Solutions are available, but they can only be impl...Solutions are available, but they can only be implemented when the benefits of doing so outweigh the benefits that result from hegemony, globalization, and the rest of the world respecting (paying rents on) the developed world's intellectual property rights.Sukh Hayrehttp://www.youdontknowwhatyoudontknow.canoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-55792593433057671192016-05-02T08:27:23.862-05:002016-05-02T08:27:23.862-05:00Biagio, the issue is that the monetary injection i...Biagio, the issue is that the monetary injection in a helicopter drop need not be permanent. That was the point of Krugman's post (see his discussion at the end of the need to convince people the injection will stay longer). For example, imagine the treasury sent checks to everyone in the United States for $1000. Once people began spending this money it would put upward pressure on inflation David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-46649746104513592812016-05-02T07:53:25.426-05:002016-05-02T07:53:25.426-05:00David, this post covers the ground for the US. As ...David, this post covers the ground for the US. As usual, I think differently from you about MP in 2003-05. In my view the policy was correct to make up for the previous mistake of letting NGDP fall significantly below trend in 2001-02. But Bernanke certainly made a mess!<br />https://thefaintofheart.wordpress.com/2016/04/17/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-1641846487409359842016-05-02T07:39:52.989-05:002016-05-02T07:39:52.989-05:00David And it´s not as if IT´s limitations were not...David And it´s not as if IT´s limitations were not known. As far back as the late 1990s, we started getting a lot of papers on "How to conduct monetary policy in a low inflation environment". One of the first was in the Cleveland Fed Annual Report for 1998: https://www.clevelandfed.org/newsroom-and-events/publications/annual-reports/ar-1998-beyond-price-stability.aspx<br />The Bernanke João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-66228790198157561102016-05-02T07:25:33.344-05:002016-05-02T07:25:33.344-05:00Thanks for this, Prof. Beckworth.
Yet I am still n...Thanks for this, Prof. Beckworth.<br />Yet I am still not clear why helicopter money wouldn't work, if it is designed to give money to those peoples and sectors who would be ready to spend it, or if it allows the government to finance new spending, without creating debt. Why would it not be effective? PK suggested that HM is not different than a case where the government finances new spendingBiagio Bossonehttps://www.blogger.com/profile/12192990143588037522noreply@blogger.com