tag:blogger.com,1999:blog-5713178645208582139.post3407089069858732000..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Hard Money Advocates are Their Own Worst EnemyDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-5713178645208582139.post-65990498511019243232013-06-04T00:24:56.371-05:002013-06-04T00:24:56.371-05:00Interestingly these arguments are made by the Eric...Interestingly these arguments are made by the Eric Dennis with almost no factual evidence or data backing the claims.Hard Money Mortagehttp://welendhardmoney.com/hard-money-lending/noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-38972417990585973722011-05-18T21:27:44.568-05:002011-05-18T21:27:44.568-05:00It strikes me that few people ever mention Estonia...It strikes me that few people ever mention Estonia, which was one of the fastest-growing countries in Europe, and I believe the fastest-growing former Soviet state before 2008, and a perfect example of hard money, tight fiscal policy. Tight money policy via a currency board. Tight fiscal policy, they've had to <a href="http://www.cato-at-liberty.org/Justin D. Tapphttps://www.blogger.com/profile/12618278252714742391noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-72446687799973390962011-05-18T09:39:52.716-05:002011-05-18T09:39:52.716-05:00One more point Dr. Beckworth:
It is expected that...One more point Dr. Beckworth:<br /><br />It is expected that fiscal austerity would be accompanied by falling interest rates, but not because of action by the Fed, but because of the very nature of austerity.<br /><br />By reducing deficits, the government reduces the "crowding out" of private investment, which means there are more financial resources available for private investment, LowerRates=/=EasyPolicynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-72304602073900918732011-05-17T19:06:57.870-05:002011-05-17T19:06:57.870-05:00No, in this case I can have it both ways. The reas...<i>No, in this case I can have it both ways. The reason being is, as you note above, that though interest rates do not necessarily always reveal the true stance of monetary policy sometimes they do an adequate job. In the IMF study case that is true for most of the period examined.</i><br /><br />So if the Fed lowers interest rates in "normal times," and they fall from say 7% to 5%, LowerRates=/=EasyPolicynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-45242897661423508042011-05-17T16:57:02.513-05:002011-05-17T16:57:02.513-05:00You can't have it both ways. If your position ...<i>You can't have it both ways. If your position is that the targeted interest rate does not necessarily show us anything with regards to how loose monetary policy really is, then you cannot use the IMF study as a gotcha against the pro-austerity anti-nominalGDP crowd.</i><br /><br />No, in this case I can have it both ways. The reason being is, as you note above, that though interest rates David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-61208068860232367462011-05-17T09:51:25.708-05:002011-05-17T09:51:25.708-05:00David,
Yes,lower nominal interest rates do not ne...David,<br /><br /><i>Yes,lower nominal interest rates do not necessarily mean easier monetary policy. My own preference for the stance of monetary policy is looking at the growth of nominal spending.</i><br /><br />Fair enough, but that is NOT what you said in this post. In this post, you definitely equated lowering interest rates with loosening monetary policy. You did so by favorably LowerRates=/=EasyPolicynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-35784179473548224442011-05-17T09:18:13.283-05:002011-05-17T09:18:13.283-05:00Last commentator,
Yes,lower nominal interest rate...Last commentator,<br /><br />Yes,lower nominal interest rates do not necessarily mean easier monetary policy. My own preference for the stance of monetary policy is looking at the growth of nominal spending.<br /><br />Unfortunately, the IMF study I cited above only looks to short-term interest rates as the stance of monetary policy and so I mentioned their measure of the stance of monetary David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-70071497328382415242011-05-17T06:59:29.988-05:002011-05-17T06:59:29.988-05:00Dr. Beckworth:
You said
"Further digging by...Dr. Beckworth:<br /><br />You said<br /><br />"Further digging by the IMF and by Mike Konczal and Arjun Jayadev found, however, that this was only true when monetary policy was lowering interest rates. Fiscal tightening coincided with a recovery only because monetary policy was easing."<br /><br />Why are you conflating lower interest rates with easy monetary policy? They don't LowerRates=/=EasyPolicynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-58271700209372910272011-05-16T09:36:35.931-05:002011-05-16T09:36:35.931-05:001.The Great Recession is not ongoing. There may be...1.The Great Recession is not ongoing. There may be another recession, but global recovery, whether slow or weak, has commenced.<br />2.The end of fractional Reserve banking was the goal of socialists and populist in the hope of taking money creation away from private finance. Some hard currency advocates try and use the same line, but it doesn't work. Hard currency and a non-fractional Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-62999915108196866412011-05-14T22:32:32.780-05:002011-05-14T22:32:32.780-05:00One has to distinguish between hard money advocate...One has to distinguish between hard money advocates who reject fractional reserve banking and those who accept fractional reserve banks but object to government control over the supply of base money in such a system. <br /><br />The former, who view any Fed action to increase the money supply as an artificial loosening, are subject to the empirical criticism leveled in this post. <br /><br />The Eric Dennishttps://www.blogger.com/profile/14083156630953907855noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-5916688961630818572011-05-14T02:12:53.869-05:002011-05-14T02:12:53.869-05:00there are honest hard money advocates, and then th...there are honest hard money advocates, and then there are people who will say absolutely anything to improve the bargaining power of capital.hapahttps://www.blogger.com/profile/11500413730344726660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-75084370194058148682011-05-13T21:53:44.416-05:002011-05-13T21:53:44.416-05:00Having a gold standard is like have a policy rule....Having a gold standard is like have a policy rule. The money supply will grow at the rate of gold production, say, 2% per year. And if there was a sudden change in the demand for money, the supply of money would not be able to adjust accordingly. This would lead to problems not unlike what we experienced during the great recession. But those who bust on hard money advocates should realize Tom Doughertynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-49594558001989654532011-05-13T20:05:27.499-05:002011-05-13T20:05:27.499-05:00The GOP has no capacity for learning. Hard money w...The GOP has no capacity for learning. Hard money was also their faith in the Great Depression. We all know how well that worked out for them last time, don't we.Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-82065104191320452632011-05-13T17:03:03.190-05:002011-05-13T17:03:03.190-05:00Hard money is a flat Earth religion - it defines m...Hard money is a flat Earth religion - it defines money in terms of gold (as opposed to a transactional medium and a store of value) and rejects the notion that money can be tight when on a gold standard. Its appeal is that it is simple and easy to understand, and translates well in a political forum.Dan Carrollhttps://www.blogger.com/profile/01263502310806035736noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-64729466497265126382011-05-13T16:03:54.757-05:002011-05-13T16:03:54.757-05:00I wish the article would point out that the Great ...I wish the article would point out that the Great Recession is still ongoing and the full effects of current policy won't be known or understood for decades to come.Anonymousnoreply@blogger.com