tag:blogger.com,1999:blog-5713178645208582139.post8026699627488653557..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: The Market Monetarist, MMT, and Austrian LovefestDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-5713178645208582139.post-28688202465556074692012-01-10T09:51:51.961-06:002012-01-10T09:51:51.961-06:00I don't understand why trading up prices on ol...I don't understand why trading up prices on old investments (equity or bonds)results in real economic improvement.<br /><br />The only direct positive effect of bidding up these financial assets is that they can improve one's ability to gain loans at a favorable rate via the banker's perception of a larger capital base. That effect can expand credit, which can result in new beezerhttp://www.beezernotes.comnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-17904015250682398422012-01-01T21:50:11.622-06:002012-01-01T21:50:11.622-06:00"Regarding the risk of NGDP targeting, the ke..."Regarding the risk of NGDP targeting, the key is that it is NGDP level targeting. That is, the Fed would have to both loosen and tighten around a long-run trend path. And if taken seriously it would actually anchor long-run inflationary expectations."<br /><br />I think my concern is not so much whether it would work in a stable economy but how it would work when the staring point is arobhttps://www.blogger.com/profile/04682517711551179057noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-60448256783540675222012-01-01T17:01:24.745-06:002012-01-01T17:01:24.745-06:00Tom,
This is a great point. I personally have c...Tom, <br /><br />This is a great point. I personally have called Monetary Policy a Rube Goldberg machine for the last several years. <br /><br />The transmission mechanism is best described in a post I wrote here.<br /><br />http://traderscrucible.com/2011/07/29/monetary-policy-sucks-because-it-relies-on-real-estate-long-live-mmt/<br /><br /><br />Even if you take monetary policy in the best Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-89833799308653101592012-01-01T16:13:18.454-06:002012-01-01T16:13:18.454-06:00David, correlation is not causation. What is the t...David, correlation is not causation. What is the transmission mechanism from expectations (psychological) to behavior (real)? <br /><br />REH involves assumptions that are questionable in the light of findings in other social sciences.<br /><br />OK. I was exaggerating on Krugman and the confidence fairy, but I think there is a close connection. And I think PK is as wrong was other monetarists Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33529655655947605372012-01-01T13:50:15.198-06:002012-01-01T13:50:15.198-06:00Re: Negative Sales Tax.
This was something...Re: Negative Sales Tax. <br /><br />This was something I thought of while reading The Economist article on heterodox economics viewpoints. I assumed that this is not a new idea but so far (via Google) I have not found any discussion on it.<br /> <br /><br />A sales tax that is allowed to go negative would seem to be a simple way to implement a stable AD policy in a way that is robhttps://www.blogger.com/profile/04682517711551179057noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-6770932488152565002012-01-01T08:12:32.300-06:002012-01-01T08:12:32.300-06:00Tom Hickey:
"However, this is not an economi...Tom Hickey:<br /><br /><i>"However, this is not an economic explanation that is empirically testable,</i> <br /><br />I am sorry you haven't taken the time to actually read the literature and are thus making this misinformed claim. Again, take a look at Gautti Eggertson paper I linked to above and the reference found therein. Or at my working paper with Josh Hendrickson. There is David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-64928163054889489092012-01-01T07:47:18.456-06:002012-01-01T07:47:18.456-06:00Macro Musings,
The Fed would probably not need to...Macro Musings,<br /><br />The Fed would probably not need to buy up all asset classes in practice, but yes it would add to add to its efficacy it could threaten to buy up all asset classes.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-51660179282427126352012-01-01T07:45:23.138-06:002012-01-01T07:45:23.138-06:00Rob,
I will have to think more about your sales ...Rob,<br /><br />I will have to think more about your sales tax idea (send any links with further info).<br /><br />Regarding the risk of NGDP targeting, the key is that it is NGDP <i>level</i> targeting. That is, the Fed would have to both loosen and tighten around a long-run trend path. And if taken seriously it would actually anchor long-run inflationary expectations.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-6341914527917240112011-12-31T11:11:54.266-06:002011-12-31T11:11:54.266-06:00Yes, I know neoliberals assert that the transmissi...Yes, I know neoliberals assert that the transmission mechanism is expectations and confidence, which they presume the central bank can use to manage economic behavior in aggregate. However, this is not an economic explanation that is empirically testable, but rather a pseudo-psychological one that has no basis in either psychological or sociological findings. It is a superstition that Paul Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42706493162947601432011-12-31T01:08:20.688-06:002011-12-31T01:08:20.688-06:00Luis H Arroyo said..."Neo chartalism sounds t...Luis H Arroyo said..."Neo chartalism sounds to me like an old Fried man´s article, that I comented herehttp://www.miguelnavascues.com/2011/10/un-mundo-imperfecto-comentarios-milton.html.<br />I think that is a very good idea, perphaps not very aceptable politically.<br />On the other hand, I suspect MMT is pure monetarism disguised, as the article of Friedman is obviously, monetarist."<Nathan Tankushttps://www.blogger.com/profile/16298104991209885385noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-60843196027895241832011-12-30T10:52:00.383-06:002011-12-30T10:52:00.383-06:00David,
It seems that that the paradigm for Market...David,<br /><br />It seems that that the paradigm for Market Monetarism is to stabilize AD while interfering as little as possible with market processes.<br /><br />The suggested policy however (buying assets until NGDP returns to trend) seems high-risk and potentially inflationary.<br /><br />Why not just have a sales tax that the government varies to maintain stable retail sales and that is Robnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-85351634191667381202011-12-30T10:49:48.492-06:002011-12-30T10:49:48.492-06:00Rates-of-change in monetary flows (our means-of-pa...Rates-of-change in monetary flows (our means-of-payment money X's its transactions rate-of-turnover), on one side of the equation, are mathematically equivalent to rates-of-change in nominal gDp on the other side. However the level and/or rate-of-change in the FFR has no such connection. The only connection is, as Sumner points out: high interest rates are prima facie evidence of an easy Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-3808836834278717762011-12-30T10:39:31.233-06:002011-12-30T10:39:31.233-06:00Hi - simple question - won't the Fed have to c...Hi - simple question - won't the Fed have to change their legal mandate to encompass buying all assets required to achieve that nominal GDP target?<br /><br />As I understand it the Fed can not buy multiple asset classes like equities and REITs.<br /><br />CMacro Musingshttps://www.blogger.com/profile/01120235319990009648noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-19946709952599528422011-12-30T04:59:13.293-06:002011-12-30T04:59:13.293-06:00Neo chartalism sounds to me like an old Fried man´...Neo chartalism sounds to me like an old Fried man´s article, that I comented herehttp://www.miguelnavascues.com/2011/10/un-mundo-imperfecto-comentarios-milton.html.<br />I think that is a very good idea, perphaps not very aceptable politically. <br />On the other hand, I suspect MMT is pure monetarism disguised, as the article of Friedman is obviously, monetarist.<br /> So, the differences are www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.com