tag:blogger.com,1999:blog-5713178645208582139.post578543053526328164..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Central Banks Still Have Much AmmunitionDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-5713178645208582139.post-19615617665007332052011-08-24T08:38:10.706-05:002011-08-24T08:38:10.706-05:00You may have already seen this, but FT Alphaville ...You may have already seen this, but <a href="http://ftalphaville.ft.com/blog/2011/08/24/661146/an-important-lesson-from-jackson-hole-2010/" rel="nofollow">FT Alphaville has an interesting take on the adverse effects of QE2</a>, namely that it has perversely convinced the market that the central bank can't really create inflation in a debt deflation.Justin D. Tapphttps://www.blogger.com/profile/12618278252714742391noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-13065091955746722172011-08-23T12:34:09.928-05:002011-08-23T12:34:09.928-05:00David,
What you are trying to explain is the “Phoe...David,<br />What you are trying to explain is the “Phoenix Miracle”, where economies can recover from a crisis while deleveraging. Fortunately, Michael Biggs and Thomas Mayer at Deustche Bank have already succeeded in explaining this seeming paradox. <br /><br />In short, your problem is that the data above deals with the STOCK of credit and you fail to realize that it is the FLOW of credit that Mike Mcnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-7719523628591084742011-08-22T23:39:34.414-05:002011-08-22T23:39:34.414-05:00Michael:
Again, how do you wrestle with the remar...Michael:<br /><br />Again, how do you wrestle with the remarkable Swedish recovery from this crisis that appears to be largely the result of aggressive monetary policy?<br /><br />http://macromarketmusings.blogspot.com/2011/06/what-successful-and-unsuccessful.html<br /><br />http://macromarketmusings.blogspot.com/2011/06/what-catch-up-growth-under-nominal-gdp.htmlDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-40309597080432639042011-08-22T23:32:25.765-05:002011-08-22T23:32:25.765-05:00Michael,
Using the second table's number, HH...Michael, <br /><br />Using the second table's number, HH debt to GDP was just over 50%. While this is about half the number today, the rate of hh deleveraging was far more pronounced then than currently. And I am not sure your claim about the deleveraging drag being larger now is right since one, the financial system was was more fragile then and two, the overall state of the economy was far David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-54133057780325525732011-08-22T18:25:06.973-05:002011-08-22T18:25:06.973-05:00David
Thanks for your response, and for generatin...David<br /><br />Thanks for your response, and for generating the nominal data. I'd still read that as saying that by 1934 there was very little 'drag" from nominal household debt reduction (especially given that household debt to GDP was much smaller then that it is now - not far from 100% at present). A 2% fall in household debt now is more than twice the drag in GDP terms a 2% Michael Reddellnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-68230168605122973792011-08-22T14:33:36.936-05:002011-08-22T14:33:36.936-05:00Michael:
Despite the desire of FDR to return the ...Michael:<br /><br />Despite the desire of FDR to return the price level to its pre-crisis level and his policy of devaluaing the gold content of the dollar, the price level did not return to its pre crisis value by 1936. See this figure: http://research.stlouisfed.org/fred2/graph/?g=1K2. Thus, there was a reduction in nominal debt as well. I added some tables to the post to illustrate this. If David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33234429691771143522011-08-22T12:58:15.602-05:002011-08-22T12:58:15.602-05:00I'm generally quite supportive of your analysi...I'm generally quite supportive of your analysis, but I don't thing the Mishkin table stands the weight you put on it. After all, it shows (a) real household debt; and(b) the fact that real household debt in 1935 and 36 was the same as that in 1929. As estimated real GDP was also the same in 1936 as in 1929, all that suggests little or no household deleveraging through that period, and Michael Reddellnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-1618305265599480792011-08-22T11:30:38.515-05:002011-08-22T11:30:38.515-05:00Really good blogging.
Ben Bernanke-san: Please r...Really good blogging. <br /><br />Ben Bernanke-san: Please read this blog.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42936920159744479622011-08-22T10:09:31.045-05:002011-08-22T10:09:31.045-05:00David
Along the same lines:
http://thefaintofheart...David<br />Along the same lines:<br />http://thefaintofheart.wordpress.com/2011/08/21/%E2%80%9Cuncertainty%E2%80%9D/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.com