tag:blogger.com,1999:blog-5713178645208582139.post2930534390869041630..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Another Look at Neo-FisherismDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5713178645208582139.post-76680017108105198002014-11-22T13:05:25.800-06:002014-11-22T13:05:25.800-06:00Targeting gDp means targeting monetary flows (our ...Targeting gDp means targeting monetary flows (our means-of-payment money times its transactions rate-of-turnover) – which is extremely easy (and doesn’t require a futures market for policy direction). Roc's in MVt are a proxy for all transactions in Irving Fisher's transaction concept (the "equation of exchange"). In the equation, whether you boost fiscal outlays vs. monetarySalmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-48324801946160252422014-11-21T09:55:43.281-06:002014-11-21T09:55:43.281-06:00Hi David,
“Below the fold is a recent Twitter dis...Hi David,<br /><br />“Below the fold is a recent Twitter discussion I had with David Andolfatto and Noah Smith on Neo-Fisherism. The big takeaway from this conversation is that we all view the expected path of the consolidated government balance sheet as being a key determinant for current aggregate demand growth. This understanding has been implicit in Market Monetarist’s calls for level Philippenoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-43557617338300267342014-11-19T07:41:18.200-06:002014-11-19T07:41:18.200-06:00"They argue that a central bank holding inter..."They argue that a central bank holding interest rates low for a long period will cause inflation to fall"<br /><br />Your talking about people that don't know the differences between money and liquid assets. Remunerating excess reserves (the Fed's credit control device), induces dis-intermediation among just the non-banks (reducing non-inflationary, or real-gDp, overall growthSalmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-72286989432286926622014-11-19T07:23:14.062-06:002014-11-19T07:23:14.062-06:00Keynesian “pump priming” vs. Fed intervention - OM...Keynesian “pump priming” vs. Fed intervention - OMOs? You really mean transfer payments to non-productive recipients vs. putting money in the primary dealers pockets. Virtually all of the economic lexicon is obsolete.Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-45263681237151038422014-11-17T17:25:51.641-06:002014-11-17T17:25:51.641-06:00I'm not sure I understand this. Ordinary mone...I'm not sure I understand this. Ordinary monetary policy actions (OMO's) have almost no effect on the consolidated government balance sheet. They had a little bit of effect back in pre-IOR days, in that they swapped a non-interest-bearing liability for an interest-bearing one. Today even that effect is gone. On the face of it, it doesn't seem likely that the monetary authority is Andy Harlesshttps://www.blogger.com/profile/17582263872850949568noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-25266985364091439522014-11-17T13:51:34.647-06:002014-11-17T13:51:34.647-06:00Nick and Bill, it is interesting to look at this i...Nick and Bill, it is interesting to look at this issue in light of what we just learned about Japan, it has entered another recession (at least if you count two consecutive quarters of GDP decline). And from only a modest sales tax increase. What I think is happening there is not that the tax itself was so consequential, but that it signaled the expected consolidated government balance sheet willDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-59820583571168512872014-11-17T07:04:55.524-06:002014-11-17T07:04:55.524-06:00I think it is hard to imagine that the change in s...I think it is hard to imagine that the change in seignorage profits is large enough to make much difference.<br /><br />What happens when hand-to-hand currency disappears in 50 years, and bank reserves pay interest, so there is no seignorage?<br /><br />By the way, it is not only possible, but I believe it is desirable, that the fiscal authority default rather than break the nominal anchor.Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-51902584705165913712014-11-16T17:00:09.380-06:002014-11-16T17:00:09.380-06:00Thinking this through:
Consider two games of Chic...Thinking this through:<br /><br />Consider two games of Chicken (with nobody holding an AK47):<br /><br />1. if the central bank wanted to tighten, and the fiscal authority wanted to loosen, the only way the fiscal authority would win is if the fiscal authority eventually forced the monetary authority to monetise the fiscal authority's debt to prevent default.<br /><br />2. If the central Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.com