tag:blogger.com,1999:blog-5713178645208582139.post7565627144808552008..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: How QE2 WorkedDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5713178645208582139.post-31297124511372300542011-04-05T19:36:05.338-05:002011-04-05T19:36:05.338-05:00David Beckworth:
I roughly think you are right, b...David Beckworth:<br /><br />I roughly think you are right, but then I wonder if "average voters" even give a hoot about QE and NGDP. That is to say if Obama backed Bernanke, they could go ahead and do it (either QE3 or NGDP), and the "pushback" would strike the voting public as mumbo-jumbo. <br /><br />Also, there is an obvious approach that NGDP and QE diminish the argumentBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-47509448306216764282011-04-04T19:51:40.709-05:002011-04-04T19:51:40.709-05:00David wrote:
"What is remarkable is that QE2 ...David wrote:<br />"What is remarkable is that QE2 has done as much as it has given that (1) the U.S. Treasury has been undermining QE2 by increasing the average maturity of the U.S. debt and (2) QE2 being implemented in a less than optimal fashion." <br /><br />Amen.<br /><br />But given Krugman's faith in the concept of the liquidity trap it is also remarkable in the face of what Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-7642883096486882542011-04-04T17:41:46.584-05:002011-04-04T17:41:46.584-05:00JoeMac:
I think all of the standard transmission ...JoeMac:<br /><br />I think all of the standard transmission channel stories can be seen as part of a broader portfolio rebalancing channel. It is just that folks tend to stress that channel they think is most important.<br /><br />I am not positive what Sumner believes is the most important channel, but he definitely sees many more transmission channels than the interest rate one.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-8376157155021086452011-04-04T17:37:37.352-05:002011-04-04T17:37:37.352-05:00Benjamin and Lee:
Yes, more monetary easing would...Benjamin and Lee:<br /><br />Yes, more monetary easing would be nice but Lee is correct that it would be far better to do it in the context of an explicit rules-based approach. All of the QEs have been so ad-hoc and while midly effective are widely unpopular. The pushback the QEs are creating is eroding the Fed's ability to do something bold like NGDP level targeting. I fear that the Fed&#David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-25237646493629268312011-04-04T16:54:28.403-05:002011-04-04T16:54:28.403-05:00David,
Sumner's last post, http://www.themone...David,<br /><br />Sumner's last post, http://www.themoneyillusion.com/?p=9071<br /><br />It sounds like he's arguing for what Krugman is arguing, the wealth effect... no?<br /><br />Also, quick question. Are the A) traditional Keynesian interest rate channel, and B) tobin's q, and C) Krugman's wealth effect channel, examples of the portfolio rebalancing channel?<br /><br />I ask JoeMachttps://www.blogger.com/profile/12650518988624821388noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-51655676357079241102011-04-04T16:25:40.262-05:002011-04-04T16:25:40.262-05:00Benjamin,
I agree that another round of quantitat...Benjamin,<br /><br />I agree that another round of quantitative easing is more likely than an explicit NGDP target. However, monetarists should be wary about supporting more quantitative easing given the present monetary and political institutions. The Fed's discretion over monetary policy and the absence of a real target help destabilise NGDP expectations; and the same powers the Fed can useLee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-80412333172120987372011-04-04T15:37:40.453-05:002011-04-04T15:37:40.453-05:00Lee Kelly-
I'll admit to somewhat talking out...Lee Kelly-<br /><br />I'll admit to somewhat talking out of school. I am not a trained economist, thought I took enough in college for a BA, and was a financial reporter for 20 years. <br /><br />I became interested in QE through Scott Suymner's (now in remission) blog.<br /><br />Still, you have economists such as Martin Feldstein saying QE boosted the stock market, and that had a Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-41631517057363265542011-04-04T13:54:53.347-05:002011-04-04T13:54:53.347-05:00Benjamin,
The problem is that another round of qu...Benjamin,<br /><br />The problem is that another round of quantitative easing is not ideal. QE3 would be just as unsatisfactory as QE2 -- better than nothing, but far from a long term solution.<br /><br />We need NGDP level targeting, maybe NGDP futures markets, some kind of arket-oriented explicit target. Occassional rounds of quantitative easing at the discretion of central bankers a dangerous Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-35995986549320560212011-04-04T13:23:10.764-05:002011-04-04T13:23:10.764-05:00Excellent post.
I think the pro-NGDP targeting an...Excellent post.<br /><br />I think the pro-NGDP targeting and QE crowd need to start talking about the need for QE3.<br /><br />A rash of "pro-QE3" posts and articles is needed.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-30695490438884862142011-04-04T12:58:05.421-05:002011-04-04T12:58:05.421-05:00Thanks for the link to your post. I have it linked...Thanks for the link to your post. I have it linked on my post now.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-13975367681929863482011-04-04T12:41:59.335-05:002011-04-04T12:41:59.335-05:00David
Much more encompassing and clear than Krugma...David<br />Much more encompassing and clear than Krugman´s "wonkish" post.<br />I just did a post commenting on DeLon´s "Anatomy of a Slow Recovery". The recovery is slow because the Fed is constrained by IT from getting people´s "expectations going". So you basically have left the "higher real returns" channel and that is unlikely to be enough.<br />http:/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.com