tag:blogger.com,1999:blog-5713178645208582139.post3651634491312010258..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Milton Friedman, Nominal Income, and Paul KrugmanDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5713178645208582139.post-39650019311290569562010-10-29T18:21:48.124-05:002010-10-29T18:21:48.124-05:00Krugman has another one up.Krugman has another one up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-34316903217291579102010-10-29T12:38:14.152-05:002010-10-29T12:38:14.152-05:00Q3 GDP Update: If we use Real Gross Domestic Purch...Q3 GDP Update: If we use Real Gross Domestic Purchases as a proxy for aggregate demand, then the Y-O-Y rate of change for Q3'10 was 4.0%, which is the largest quarterly increase since 2004. This might be considered "robust revival" and lessen the case for more QE. Is this not a better indicator of recovery than Final Sales of Domestic Product?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-80238338467251593802010-10-28T16:30:11.693-05:002010-10-28T16:30:11.693-05:00Richard,
One caveat: paying interest on reserves ...Richard,<br /><br />One caveat: paying interest on reserves only drives down the money multiplier if the Fed doesn't offset the decline by increasing the supply of reserves in proportion. My hunch is that without the option to pay interest on reserves, the Fed would merely have offset the difference by supplying fewer reserves in the first place. In other words, it is not the interest being Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-7057683302942540682010-10-28T14:24:39.479-05:002010-10-28T14:24:39.479-05:00Friedman was critical of the Fed's decision in...Friedman was critical of the Fed's decision in the mid to late 30s to raise reserve requirements. I suspect that if Friedman was around today he would be critical of the Fed's decision to pay banks to increase their reserves. Either approach drives down the money multiplier.Richard A.noreply@blogger.com