tag:blogger.com,1999:blog-5713178645208582139.post7554949473401173787..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Obstfeld and Rogoff's New PaperDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5713178645208582139.post-87609582448487884972009-10-12T22:43:14.314-05:002009-10-12T22:43:14.314-05:00dlr and Bill: I have a new post up where I look a...dlr and Bill: I have a new post up where I look at the productivity forecasts and productivity news stories for the period in question.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-52691637725258763752009-10-12T14:09:51.878-05:002009-10-12T14:09:51.878-05:00My view is that the role of any price, including i...My view is that the role of any price, including interest rates, is to coordinate. If entrepreneurs underestimate the true productivity of capital, the interest rate should fall to reflect their perceptions, not some unknown platonic reality.<br /><br />Perhaps I am missing something, but I think in terms of supply and demand. That savings are higher than they would have been if interest Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-11194432372017639942009-10-11T16:27:41.957-05:002009-10-11T16:27:41.957-05:00ECB, now that is an interesting view I had not con...ECB, now that is an interesting view I had not considered!<br /><br /><br />dlr, that is a fair point--expected TFP may have been lower than actual TFP. I am not sure how to measure expected TFP. I recall reading, though, back in 2003 or 2004 articles that were questioning why productivity growth was so strong. Maybe expected TFP dropped off in 2001-2002 and then with data coming in it picked upDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-59246049366896931852009-10-11T16:21:23.994-05:002009-10-11T16:21:23.994-05:00dlr makes a point that Paul Krugman made, concerni...dlr makes a point that Paul Krugman made, concerning uncertainty over the true TFP during this period. He argues that it is nigh impossible to get a meaningful measure of FIRE productivity (number of mortgages securitized? Number of CDOs you can squeeze out of given mortgage pool ? Number of CDS written per employee?) Since FIRE WAS the economy in 2003-05, we have intractable measurement issues. ECBnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-49206157328242907232009-10-11T15:49:15.800-05:002009-10-11T15:49:15.800-05:00Good post, but I’m not sure the TFP data closes th...Good post, but I’m not sure the TFP data closes the case. Isn’t is possible that declining global savings, low real interest rates and high measured productivity can still be consistent with an increased desire for savings if expected marginal productivity was lower than actual TFP? Let’s say a society underestimates the availability of high return projects. It believes incremental yields are Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-55051321837919533762009-10-11T13:37:31.976-05:002009-10-11T13:37:31.976-05:00Alfred Marshall writing in 1880s argued that nomin...Alfred Marshall writing in 1880s argued that nominal interest rates reflect inflation only with a lag, so that a boom became self-propagating as rising inflation reduced the real interest rate and "excited" borrowers. So maybe the Fed's actions were just replicating the natural market order observed in the era of the Gold Standard!ECBnoreply@blogger.com