tag:blogger.com,1999:blog-5713178645208582139.post154912593124363455..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Four Questions for Ben Bernanke on His Global Saving Glut HypothesisDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-5713178645208582139.post-7637297002084349522011-02-25T11:11:10.929-06:002011-02-25T11:11:10.929-06:00http://wallstreetpit.com/9658-current-crisis-globa...http://wallstreetpit.com/9658-current-crisis-global-imbalances-were-caused-by-the-asian-savings-glut<br /><br />Michael Pettis has written about/defended the GSG before as well.GTnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-68879146049547853742011-02-24T12:46:36.464-06:002011-02-24T12:46:36.464-06:00of your interest perhaps
http://cuadernodearenacom...of your interest perhaps<br />http://cuadernodearenacom.blogspot.com/2011/02/fed-in-interecessions-period.htmlwww.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-88632952617997535472011-02-23T15:27:26.364-06:002011-02-23T15:27:26.364-06:00David, I´m just now reading Rajan´s "Fault Li...David, I´m just now reading Rajan´s "Fault Lines", and I become more convinced of your arguments. Perhaps I was missing the complete landscape of the question.www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-59494370240978042512011-02-23T13:57:19.933-06:002011-02-23T13:57:19.933-06:00I find Bernanke's argument regarding global sa...I find Bernanke's argument regarding global savings gluts to be compelling. <br /><br />I suspect the challenges of the future will be to stimulate the economy even as interest rates stay near zero bound. <br /><br />In general, I am unsympathetic to arguments that "the Fed made me do it." Rings like "The bartender got me drunk." <br /><br />The housing bubble, and Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-36940812540991287912011-02-22T22:06:15.316-06:002011-02-22T22:06:15.316-06:00Caballero:
A global perspective on the great finan...Caballero:<br />A global perspective on the great financial insurance run: Causes, consequences, and solutions (Part 1)<br />at Voxeu<br /><br />He also has a paper entitled "The Pretense of Knowledge" echoing Hayek, that really none of our extant models can get to grips with this extraordinary event. Everyone - you, me, the monetarists, the Austrians, the Minskyites - has their ecbnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-10703625462732690292011-02-22T20:45:38.377-06:002011-02-22T20:45:38.377-06:00ECB,
That Post-Keynesian excerpt is not too diffe...ECB,<br /><br />That Post-Keynesian excerpt is not too different than the David Laibson and Johanna Mallerstrom paper that argued the saving from Asia responded to demand for funds in the U.S. economy. I posted on it <a href="http://macromarketmusings.blogspot.com/2010/03/another-nail-in-global-saving-glut.html" rel="nofollow">here</a>. Bernanke needs to wrestle with this paper too.<br /><br />OnDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-12487935278804720802011-02-22T18:51:34.586-06:002011-02-22T18:51:34.586-06:00DB: I'm so glad to see you are now a Post-Keyn...DB: I'm so glad to see you are now a Post-Keynesian!<br />Here is what Professor Steve Keen wrote a while ago:<br /><br />The textbook argues that savings must occur first before investment can occur—and since the poor Chinese happen to be good savers, while the rich Americans are lousy savers, the financial flows went from China to the USA. So the US crisis is all China’s fault.<br /><br />ecbnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-28094803187996211282011-02-22T16:26:33.681-06:002011-02-22T16:26:33.681-06:00Luis:
Yes, I should have been more careful in not...Luis:<br /><br />Yes, I should have been more careful in noting that because emerging economies were for the most part buying up Treasuries and agencies, it left little else for other investors and thus the financial system responded by making safe assets out of risky ones. I made a small change in the post to better reflect this point. <br /><br />Note, though, that China and other parts of David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-85684691441990464832011-02-22T14:51:26.061-06:002011-02-22T14:51:26.061-06:00David
Once more I took the opportunity to write a ...David<br />Once more I took the opportunity to write a post on the subject you broach!<br />But the take is very different.<br />http://thefaintofheart.wordpress.com/2011/02/22/bernanke%c2%b4s-gsg-hypothesis-a-cop-out/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-41350817836355429062011-02-22T11:20:45.471-06:002011-02-22T11:20:45.471-06:00David, You say:
1 "He shows that investors fr...David, You say:<br />1 "He shows that investors from these countries, as well as from Europe, had a strong appetite for AAA-rated assets which were in short supply elsewhere. The U.S. financial system responded by transforming risky assets into safe assets."<br />Mistake: Bernanke said there were not emerging countires (wich prudently bought treauies) but eurpean banks, that bought MBS.www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-75601235475726242152011-02-22T11:15:40.255-06:002011-02-22T11:15:40.255-06:00This comment has been removed by the author.www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-35974950647079610122011-02-22T10:43:53.920-06:002011-02-22T10:43:53.920-06:00It does seem self-serving on the part of the Fed. ...It does seem self-serving on the part of the Fed. But what do you say to Caballero's comment that tight monetary policy in the 1990s didn't prevent low long-term rates back then, the so-called conundrum.ecbnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-27261773241032825142011-02-22T10:21:28.946-06:002011-02-22T10:21:28.946-06:00David,
I find measures of the "Taylor Rule Ga...David,<br />I find measures of the "Taylor Rule Gap" to be very misleading. John Taylor himself had a chart showing the Gap this in the WSJ earlier this year. It is misleading because it can appear to the reader as though the Fed “should” have held interest rates higher by an average of about 250 bps <i> at each and every point in time </i>from 2002 to 2007. But if the Fed had been Gregor Bushhttps://www.blogger.com/profile/12860710727031361582noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-45954336926489966822011-02-22T07:07:08.918-06:002011-02-22T07:07:08.918-06:00Antonio:
I provided an update that better explain...Antonio:<br /><br />I provided an update that better explains the Taylor rule gap.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-74170116272369276502011-02-22T04:58:55.509-06:002011-02-22T04:58:55.509-06:00Hello David, could you please explain how to read ...Hello David, could you please explain how to read the graphs you put in the post. In particular I'm interested in the graph showing the Taylor gap, you said that it represent the stance of U.S. monetary policy, could you be more specificUnknownhttps://www.blogger.com/profile/10087124467470276836noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-17914244378855823162011-02-22T00:02:18.017-06:002011-02-22T00:02:18.017-06:00Just noticed multiple typos in my post. They have ...Just noticed multiple typos in my post. They have been fixed.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-64303708424851592932011-02-21T14:34:50.396-06:002011-02-21T14:34:50.396-06:00Luis:
I have already responded to the Woodford pa...Luis:<br /><br />I have already responded to the Woodford paper <a href="http://macromarketmusings.blogspot.com/2010/12/yes-tyler-low-interest-rates-mattered.html" rel="nofollow">here</a>.<br /><br />How do you specifically address the questions raised in the post?David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-17591257652038145322011-02-21T14:18:53.512-06:002011-02-21T14:18:53.512-06:00Sorry, sir, but I´ve red the speech and I don´t th...Sorry, sir, but I´ve red the speech and I don´t think Bernanke is excusing the FED. He says very clear that there were huge fault of regulation and supervision. <br />We have red a different paper, perhaps?<br />My opinion is that global imbalances were a source, but not the cause, of the crisis. the cause was, as Bernanke says, The MBS and all the derivatives that propitiated the highest www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-79011407396085455702011-02-21T13:22:27.699-06:002011-02-21T13:22:27.699-06:00Philo:
Yes, I shouldn't have said "force...Philo:<br /><br />Yes, I shouldn't have said "forced", but my point is that given mercantilism it seems obvious that some of the saving glut is just recycled U.S. monetary policy. Why won't Bernanke admit it? Your answer about protecting the Fed seems to be the best one. Do you think this is a conscious thing or is Bernanke unconsciously getting caught up in defending his David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-41248291688202069912011-02-21T13:08:16.230-06:002011-02-21T13:08:16.230-06:00According to the Bernanke theory: "The cheap...According to the Bernanke theory: "The cheaper credit in turn fueled the U.S. housing boom." Why housing, in particular? Wouldn't low interest rates encourage all sorts of investment? Developing countries' governments, as well as individual savers in these countries, would not directly be demanding houses in the U.S. (More likely, they were demanding U.S. Treasurys, therebyPhilohttps://www.blogger.com/profile/02814125172453918700noreply@blogger.com