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Scott Sumner: May 2014

An Author Archive by Month (13 entries)

Can we have confidence in our opinions on immigration?

Labor Mobility, Immigration, Outsourcing
Scott Sumner
Bryan Caplan has a post that discusses a hypothetical eugenic regime: Imagine a Eugenic America where citizens who earn less than median income are forbidden to have children. Enforcement isn't perfect, so 5% of all kids born are "illegals." Over... MORE

Wolfgang Munchau has a nice article in the Financial Times on inflation targeting. I agree with much of what he has to say, but will offer mild criticism of two points. Here's how Munchau begins: Back in the 1990s... MORE

Tom Brown sent me to an Austrian critique of monetary stimulus (in this case negative interest on reserves): Negative deposit rates" means that the banks will charge the customer for saving money and placing it in the bank. According to... MORE

Matt Yglesias has a post suggesting that if the NBA were "any normal industry" it would not be able to get away with collusive schemes like the NBA draft. For those who don't follow American sports, the new players entering... MORE

The middle class is doing fine

Income Distribution
Scott Sumner
When I start reading an article there are a few red flags I look out for. If the writer starts discussing income inequality data as if it tells us something useful about economic inequality, I know I can pretty much... MORE

Has Medicaid succeeded?

Economics of Health Care
Scott Sumner
Fifty years ago America spent about 8% of GDP on "national defense" and 0% of GDP on Medicaid. By 2015 spending on both programs is forecast to be about 3% of GDP (roughly $540 billion--including the state portion of the... MORE

What is monetary policy?

Monetary Policy
Scott Sumner
When I use the term 'monetary policy' it refers to actions taken by the monetary authority aimed at influencing the supply or demand for base money, with the ultimate objective of influencing a broader set of macro variables, such as... MORE

I recall a movie where a guy asks his buddy if his girlfriend is intelligent. The buddy replies "she's average." And the other guy responds "average is dumb." Most people agree. I don't know if that's fair overall (I doubt... MORE

Never debate the impact of a price change

Monetary Policy
Scott Sumner
There as been a lot of recent discussion about the "Neo-Fisherite" claim that higher interest rates lead to higher inflation. Noah Smith has a good summary. Unfortunately the debate has been marred by a lack of precision. What is being... MORE

The paradoxes of applying nationalism to immigration

Labor Mobility, Immigration, Outsourcing
Scott Sumner
Consider two policy options: A. The US admits 1 million immigrants per year between now and 2050. B. The US admits 3 million immigrants per year between now and 2050. Suppose we only cared about the welfare of Americans. Would... MORE

When ideologies change

Labor Market
Scott Sumner
Over the past 5 years I've done a number of posts discussing a strange phenomenon. My views on money/macro are in many respects quite close to the consensus view of 2007: 1. Fiscal stimulus is ineffective. 2. Monetary stimulus can... MORE

Broadly speaking, there are three approaches to stabilization policies and business cycles: 1. Stop the excesses: In this view, monetary policy is too expansionary at certain times. Some people worry about excessive real GDP growth. Others worry about asset prices... MORE

The correct reason to oppose high MTRs

Tax Reform
Scott Sumner
In a recent post I suggested that relatively high marginal tax rates on consumption of the ultra-rich might be justified as part of a tax reform package that abolished the personal income tax, and also abolished the corporate income tax,... MORE

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