tag:blogger.com,1999:blog-5713178645208582139.post322553074029944645..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Putting Klingonomics to the TestDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-5713178645208582139.post-52953227216775989592009-09-29T12:44:09.670-05:002009-09-29T12:44:09.670-05:00Bill Woolsey:
I would have thought that the reason...Bill Woolsey:<br />I would have thought that the reason the real GDP held up (ie only fell 2-3% and didnt fall 10% or more) was thanks to the automatic stabilizer function of fiscal policy. Around October 2008 the deficit dramatically increased<br />Wonder if monetary base increase simply reflects the fiscal deficit ? (I'm guessing the folks at Kansas City would say yes!)ECBnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-47668023321562416952009-09-29T11:02:55.905-05:002009-09-29T11:02:55.905-05:00That is a good point Bill, you are being a better ...That is a good point Bill, you are being a better econometrican than me in interpreting my results. Yes, the results do show the effect of a monetary base shock holding all else equal(i.e. the model controls for the influences of the other variables). Therefore, they do imply as you suggest that had the monetary base been frozen since 2007 that the crisis would have been far worse. <br /><br />ADavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-70237021218986940952009-09-29T10:27:38.048-05:002009-09-29T10:27:38.048-05:00I hate to just prove my ignorance, but I was puzzl...I hate to just prove my ignorance, but I was puzzled by ECB's claim that there was a surge in base money over the last year and no real response. <br /><br />To me, that would suggest that if base money had remained at roughly 800 billion, then all the real variables, expecially real GDP, would have been the same. My humble opinion is that if the monetary base remained at 800 billion or Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-87482241870292619082009-09-29T09:25:42.115-05:002009-09-29T09:25:42.115-05:00I'm thinking that the Philadelphia Fed has som...I'm thinking that the Philadelphia Fed has some survey data...<br />http://www.phil.frb.org/research-and-data/real-time-center/survey-of-professional-forecasters/<br />Hope that helps!ECBnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-8245927599419409312009-09-29T08:51:21.031-05:002009-09-29T08:51:21.031-05:00ECB:
Yes, I know the TIPs data is plagued with a ...ECB:<br /><br />Yes, I know the TIPs data is plagued with a liquidity premium and went looking for the Cleveland Fed's adjusted expected inflation series that corrects for it. However, they took it down because of the crisis. I also thought of getting survey data on expected inflation, but given time constraints I settled for the crude TIPs. So is there a place I can get survey data at a David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-55294200374169355312009-09-29T08:27:34.759-05:002009-09-29T08:27:34.759-05:00"In other words, an unexpected positive incre..."In other words, an unexpected positive increase in the monetary base historically has led to an increase in the short run of real economic variables."<br />Ooh...I'm not buying that bag of rotten apples David!! Last fall we had the mother of all positive base shocks and we're still waiting for the increase of real variables!!ECBnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-79308777520068953472009-09-29T08:20:15.980-05:002009-09-29T08:20:15.980-05:00David, there are some serious problems using TIPS ...David, there are some serious problems using TIPS to get expected inflation as its contaminated by other factors, see Carlson & Fuerst, Cleveland Fed Letters 2004.<br />Maybe using some survey of inflation expectations or perhaps doing an ARIMA model of inflation and using residuals would get around this problem?ECBnoreply@blogger.com