tag:blogger.com,1999:blog-5713178645208582139.post3434000577391693834..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Pop Quiz for Hard Money AdvocatesDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-5713178645208582139.post-90753416379740632492011-01-10T18:25:04.320-06:002011-01-10T18:25:04.320-06:00David, thanks for your response. Will mull it over...David, thanks for your response. Will mull it over. Look forward to future posts on this issue.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-46022182413131080382011-01-10T13:50:33.498-06:002011-01-10T13:50:33.498-06:00JP Koning:
The last figure in the post shows why ...JP Koning:<br /><br />The last figure in the post shows why I believe prices have not fully adjusted to jump in money demand: nominal spending has not fully recovered. If price adjustments had been sufficient this wouldn't be the case.<br /><br />QE2 is about more than just satiating the rise in money demand. It is about changing expectations such that households and firms will not want to David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-45248865567252645752011-01-07T21:31:52.852-06:002011-01-07T21:31:52.852-06:00This and your Dec 30 post still do not convince me...This and your Dec 30 post still do not convince me.<br /><br />Yes, there has been a tremendous increase in the demand for safe and liquid assets.<br /><br />But I can say just as easily that this has been met by 1. the Federal Reserve providing reserves and cash, 2. Commercial banks and thrifts dramatically expanding demand and savings deposits, and 3. Federal, municipal governments issuing JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-81130635761783540852011-01-07T10:10:21.347-06:002011-01-07T10:10:21.347-06:00David,
That would be awesome. You are a good writ...David,<br /><br />That would be awesome. You are a good writer, and I am confident you would do a good job.Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-53253804631782758562011-01-06T17:16:35.204-06:002011-01-06T17:16:35.204-06:00Lee,
We need a Basic Economics-type book that, am...Lee,<br /><br />We need a Basic Economics-type book that, among other things, explains monetary economics from a monetary disequilibria approach to a broad audience. If done right it could provide a way to reach conservatives. Maybe after I get tenure I should try to get some grant money for such a project.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-27677297611267321082011-01-06T17:10:01.115-06:002011-01-06T17:10:01.115-06:00Anonymous:
Lack of money is not the fundamental p...Anonymous:<br /><br />Lack of money is not the fundamental problem. Rather, it is the spike in money demand shown in this post. Yes, more monetary stimulus is the solution to this problem only to the extent it changes expectations and causes firms and households with excess money balances to spend them. See my National Review article for more on how monetary policy can address this money demand David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-34732421929140079282011-01-06T16:08:35.792-06:002011-01-06T16:08:35.792-06:00David,
Check out Thomas Sowell's recent inter...David,<br /><br />Check out Thomas Sowell's recent interview on Uncommon Knowledge over at nationalreview.com: he slams QEII and opposes further expansionary monetary policy. His explanation of why is all about the money <i>supply</i>; he assumes that banks have to start lending for monetary stimulus to work; and he appears to not comprehend any conservative case for quantitative easing.<br /Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-91008485593701454142011-01-06T14:32:24.011-06:002011-01-06T14:32:24.011-06:00Conservatives seem not to think about money in ter...Conservatives seem not to think about money in terms of supply and demand; they often have difficulty with the concept and are hostile with anyone who brings it up. Ironically, conservative <i>economists</i> often commit the same errors as vulgar Keynesians, e.g. confusing the demand for money with the demand for credit.<br /><br />The anonymous commenter above is a wonderful example of this kindLee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-84209820021215737672011-01-06T09:21:10.003-06:002011-01-06T09:21:10.003-06:00There is something wrong in an analysis that concl...There is something wrong in an analysis that concludes that lack of money is our problem. Companies have bundles of cash they will not spend. Banks have massive reserves they cannot or will not lend. There is significant commodity price inflation, and yet U6 remains around 19%.<br /><br />Lack of money is not causing a credit crunch for McDonalds or Microsoft. These companies are issuing bondsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-82028127476995212142011-01-06T05:17:05.470-06:002011-01-06T05:17:05.470-06:00Interesting charts. I think it is normal for the p...Interesting charts. I think it is normal for the private sector to go liquid in a recession or credit crunch. From a cursory look the first chart, the smaller spikes in the 1950s-90s coincided with recessions, but it would be nice to see those earlier recessions superimposed on the above chart.<br /><br />Presumably the big recent spike was caused by the fact that liquid assets had been reduced Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-72149590119891028792011-01-06T04:48:52.206-06:002011-01-06T04:48:52.206-06:00This comment has been removed by the author.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-26174705393143259052011-01-05T18:16:28.590-06:002011-01-05T18:16:28.590-06:00This is an excellent post. Well done, and readable...This is an excellent post. Well done, and readable. <br /><br />Add to that, unit labor costs are falling at 2 percent annual rate, and commercial rents of all kinds are flatter than a dead cobra. <br /><br />I hope we can have some inflation, but I am not sure.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com