tag:blogger.com,1999:blog-5713178645208582139.post373735976495830633..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Nominal Demand Ain't What It Used to BeDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5713178645208582139.post-78603627945118224732016-08-29T11:47:55.030-05:002016-08-29T11:47:55.030-05:00Right now the Fed is trying for 2pct inflation and...Right now the Fed is trying for 2pct inflation and approx 3pct growth. <br />How would NGDP targeting change what they are doing. Doesn't a 2pct inflation target mean the same thing as 5pct NGDP in practice. <br /><br />As for how the Fed is supposed to be so precise, no one seems to explain. I suppose it could follow the Friedman rule and let money/banks/lending (whatever is your favorite)Denyshttps://www.blogger.com/profile/07318259343300138367noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-43326937953525558222016-08-18T14:45:54.934-05:002016-08-18T14:45:54.934-05:00Thomas, I actually am a big fan of Selgin's pr...Thomas, I actually am a big fan of Selgin's productivity norm. It would be my ideal form of a NGDPLT. However, we have to start somewhere and I suspect that realistically it would be somewhere between 3-5%.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-76205402711203833852016-08-18T12:42:53.139-05:002016-08-18T12:42:53.139-05:00Is this the velocity that you use for divisia?
ht...Is this the velocity that you use for divisia? <br />https://fred.stlouisfed.org/graph/fredgraph.png?g=6FJj<br />If so, it is still declining. How do you see this dragging on the price level?Edward Lamberthttp://effectivedemand.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-65959106350412853482016-08-18T12:28:58.871-05:002016-08-18T12:28:58.871-05:00Do you use the velocity of divisia in MV = PY? Do you use the velocity of divisia in MV = PY? Edward Lamberthttp://effectivedemand.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-14627037183654372432016-08-18T02:23:09.544-05:002016-08-18T02:23:09.544-05:00Thanks David. This paper suggests the structural b...Thanks David. This paper suggests the structural break too place in the early 1990s though. https://www.federalreserve.gov/econresdata/feds/2016/files/2016035pap.pdf <br /><br />I think the modelling of regime changes is quite important in trying to identify appropriate starting points. Sadly there isn't enough data to run a Markov switching model though. <br /><br />I think George S has Thomas Aubreyhttp://www.creditcapitaladvisory.comnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-4072291410672248582016-08-17T20:27:00.946-05:002016-08-17T20:27:00.946-05:00I use 1985-2007 since that is a commonly used benc...I use 1985-2007 since that is a commonly used benchmark period. It is the 'Great Moderation' period.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-48100924633837987942016-08-17T20:26:00.577-05:002016-08-17T20:26:00.577-05:00If I am going to look at money, I actually prefer ...If I am going to look at money, I actually prefer to use a broader measure of money like the <a href="http://www.centerforfinancialstability.org/amfm_data.php" rel="nofollow">Divisia M4 measure.</a>. Empirically, it does a better job than narrow measures like M2 in conforming to the standard notions of what monetary shocks do to the economy. Josh Hendrickson and I <a href="http://people.wku.edu/David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-80225516771128120632016-08-17T16:06:17.268-05:002016-08-17T16:06:17.268-05:00David, Why did you decide to take the average from...David, Why did you decide to take the average from 1985? It skews the data quite a lot. 1990-2007 is lower but perhaps a more realistic benchmark. Inflation expectations were still quite high in mid to late 80s.Thomas Aubreyhttp://www.creditcapitaladvisory.comnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-55435837059012300632016-08-17T11:41:08.864-05:002016-08-17T11:41:08.864-05:00David, How do you figure in the slowing velocities...David, How do you figure in the slowing velocities of M2 and MZM? How do you see their slowing velocities dragging on the price level?Edward Lamberthttp://effectivedemand.typepad.com/noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-51483084379670031962016-08-17T09:25:46.775-05:002016-08-17T09:25:46.775-05:00What we need is a different way of thinking about ...What we need is a different way of thinking about this problem.<br /><br />A revolution took place in economics following the 1930s collapse of the 19th century classical/neoclassical paradigm imbedded in free-market ideology. That paradigm was replaced following World War II by what became known as the neoclassical-synthesis guided by a mixed-economy ideology. Collapse of the Anonymoushttps://www.blogger.com/profile/16011736382575746163noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-14891563294554117762016-08-17T07:04:28.359-05:002016-08-17T07:04:28.359-05:00The fear of market monetarism is that the "ma...The fear of market monetarism is that the "market" won't allow the Fed to control the amount of monetary stimulus - vast amounts of monetary stimulus will trigger uncontrollable inflation. Of course, that's the point of market monetarism. Sumner et al. respond by saying that the "market" will be mostly if not entirely dormant, because the Fed will implement monetary raywardhttps://www.blogger.com/profile/03723450690502187828noreply@blogger.com