tag:blogger.com,1999:blog-5713178645208582139.post8674497356011108364..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Assorted MusingsDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5713178645208582139.post-77570151867297765442009-10-08T16:42:59.099-05:002009-10-08T16:42:59.099-05:00Thanks David. With all due respect to you, it see...Thanks David. With all due respect to you, it seems to be, as I thought, one of these economic ideas that emerges from a stylised analysis that gets picked up and used uncritically as a rule of thumb by many who have not followed the theory. I would imagine, for example, that GDP growth as a country absorbs more people (eg by immigration) has different implications for interest rates than GDP RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-71055753043140538932009-10-07T17:20:09.810-05:002009-10-07T17:20:09.810-05:00Hey RebelEconomist,
I first came across this idea...Hey RebelEconomist,<br /><br />I first came across this idea in the Economist magazine back in 2004. They explained the way to “interpret this [metric] is to see America’s nominal GDP growth as a proxy for the average return on American Inc. If the return is higher than the cost of borrowing, investment and growth will expand [and vice versa].<br /><br />I would look at it this way. The David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-66818974649533969462009-10-07T04:00:13.932-05:002009-10-07T04:00:13.932-05:00Greetings David,
I will ask here rather than on t...Greetings David,<br /><br />I will ask here rather than on the post you refer to in case you are no longer watching its comments. What is the reason why you use nominal GDP growth as a benchmark for short-term interest rates (I have seen this used many times in market economists' research, but the justification is rarely given)? Is it some Ramsey golden rule type idea? Thanks.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-13098011658068242412009-10-06T22:17:48.699-05:002009-10-06T22:17:48.699-05:00I like your idea. I will run it by my congressman...I like your idea. I will run it by my congressman and the Dallas Fed!David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-57943461796213848922009-10-06T22:03:16.705-05:002009-10-06T22:03:16.705-05:00On Federal Reserve "independence". Would...On Federal Reserve "independence". Would it not be better to outsource monetary policy to the BIS ? In the 1970s, the UK effectively outsourced policy to the IMF during the sterling crisis under the Labour govt. Italy and Greece adopted the euro to "tie the hands" of their dysfunctional governments. America might wisely copy this strategy given the fairly dreadful quality of ECBnoreply@blogger.com