tag:blogger.com,1999:blog-5713178645208582139.post5963959138013536567..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: The FOMC's Decision in a Parallel UniverseDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5713178645208582139.post-85063407263582790402012-08-02T12:04:22.329-05:002012-08-02T12:04:22.329-05:00Gloeschi,
You are obviously late to the conversat...Gloeschi,<br /><br />You are obviously late to the conversation. Money demand is elevated, money supply has fallen, and by implication nominal spending is artifically depressed. No trends are needed, but they do illustrate the point. See the following for some catch-up reading:<br /><br />1. Money demand has sharply risen: <a href="http://macromarketmusings.blogspot.com/2011/10/David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-74743638707301104992012-08-02T11:45:21.892-05:002012-08-02T11:45:21.892-05:00I don't quite follow: in which part of the wor...I don't quite follow: in which part of the world is nominal spending depressed?<br />If the government spending = income, then we could "spend" our way to riches? The multiplier on $1 additional debt to GDP is currently 0.43 in the US. So you have debt going up 2.3x faster than GDP. And you are advocating spending more? Wasn't that the problem in the first place? <br />The Gloeschihttps://www.blogger.com/profile/10705125909506053628noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33975903346683703972012-08-02T11:38:32.951-05:002012-08-02T11:38:32.951-05:00dwb,
Yes, this universe does feel surreal. And m...dwb,<br /><br />Yes, this universe does feel surreal. And most people take it for granted this is way it has to be. I can only conclude that the economics profession has failed to fully learn the lessons of the Great Depression. I hope future economic historians come to realize the true nature of this Little Depression.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-4464876080244698772012-08-02T11:35:16.817-05:002012-08-02T11:35:16.817-05:00Becky,
I think Ryan Avent would be well suited to...Becky,<br /><br />I think Ryan Avent would be well suited to write the 2.0 version. He had some epic posts recently on the failures of central banks. They would make great chapters in the book.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-40182364667662217472012-08-02T11:34:31.643-05:002012-08-02T11:34:31.643-05:00Gloeschi,
Nominal spending and nominal incomes ar...Gloeschi,<br /><br />Nominal spending and nominal incomes are inordinately depressed. Given sticky nominal debt and sticky prices this means real growth is far below its potential. Correcting this mistake is not does not borrow growth from the future nor does it only lead to higher inflation. See FDR in 1933.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-36713998250702504752012-08-02T09:37:02.343-05:002012-08-02T09:37:02.343-05:00i feel like this IS the surreal parallel universe....i feel like this IS the surreal parallel universe. today Draghi talked about how EU inflation was running at 2.2% but was expected to go down due to declining oil prices. Can we PLEASE make the current incarnation of Bernanke and co go back and read Bernanke and Gertler's earlier work on how high oil prices are contractionary due to the monetary response... What planet to i live, where the EUdwbhttps://www.blogger.com/profile/02799793864068767226noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42760408337821613392012-08-02T08:38:58.651-05:002012-08-02T08:38:58.651-05:00Lords of Finance 2.0 indeed. Yglesias also had thi...Lords of Finance 2.0 indeed. Yglesias also had this book on his mind and like him, now I believe it was my favorite on this whole mess.Becky Hargrovehttps://www.blogger.com/profile/06893439243744595860noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-32843446884317707682012-08-02T06:38:35.387-05:002012-08-02T06:38:35.387-05:00Assistant professor:
Monetizing debt does not crea...Assistant professor:<br />Monetizing debt does not create GDP growth. It may help the government run even larger deficits (which in your obviously Keynesian views is a good thing) but which, according to commons sense, will only borrow growth from future periods.<br />How is real GDP going to grow if real incomes are stagnant at best? What is the purpose of inflating nominal GDP via inflation Gloeschihttps://www.blogger.com/profile/10705125909506053628noreply@blogger.com