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Scott Sumner: August 2014

An Author Archive by Month (15 entries)

Intellectual decay

Political Economy
Scott Sumner
Tyler Cowen recently linked to a good article by Francis Fukuyama: The two dominant American political parties have become more ideologically polarized than at any time since the late nineteenth century. There has been a partisan geographic sorting, with... MORE

Mr. Bernanke vs. the Structuralists

Monetary Policy
Scott Sumner
Vaidas Urba sent me an interesting piece from the Financial Times: For macro investors, the end of summer is usually signalled by the Kansas City Fed's annual conference at Jackson Hole. On occasions, former Fed chairman Ben Bernanke used this... MORE

Never reason from a bond price change

Monetary Policy
Scott Sumner
Here's Brad DeLong: I have to say that most of what I have quoted from Nick seems wrong to me. Yes, in 1982-1983 it was true to say "it became harder than normal to sell other goods for money... MORE

Nominal GDP targeting in developing countries

Monetary Policy
Scott Sumner
Commenters Patrick Sullivan and gofx directed me to a post on NGDP targeting in developing countries, by Pranjul Bhandari and Jeffrey Frankel: Targeting Nominal GDP has been proposed in the context of major industrialised countries. (Frankel, 2012, gives other references... MORE

When supply is demand

Macroeconomics
Scott Sumner
In order to do good economic analysis, it is important to distinguish between supply and demand shocks. Commenter SG pointed me to this curious post by Paul Krugman: For those new to or confused by the term, secular stagnation is... MORE

Grade deflation, grade illusion, and academic depressions

Economics of Education
Scott Sumner
Standard monetary theory says that changes in the money supply and prices are neutral under certain circumstances, such as in the very long run, and also after monetary reforms where all contracts are automatically adjusted to the change in the... MORE

Here is The Economist: IF ABENOMICS means anything, it is the promise of the prime minister, Shinzo Abe, to restore healthy economic growth to Japan and end years of deflation. To that end the central bank, sloughing off its... MORE

Tyler Cowen on ECB policy

Monetary Policy
Scott Sumner
Here's Tyler Cowen commenting on ECB policy options for addressing lowflation: 2. Nominal gdp targeting. In general I like this idea, but which ngdp gets targeted? Eurozone ngdp, presumably. But when you have multiple countries, individual countries can end up... MORE

Jonathan Chait's bizarre idea of an honest poll

Political Economy
Scott Sumner
Here's Jonathan Chait: And Reason's poll does yield many findings that align millennials more closely with right-wing economic thought than with left-wing economic thought. It does so through the use of crafted language. As noted above, Pew's poll asks a... MORE

I recall a story that scientists are often unable to explain the "tricks" performed by magicians. Scientists tend to be smart, but also rather linear thinkers. They are not used to their test tubes trying to deceive them. Something similar... MORE

The power of wishful thinking?

Income Distribution
Scott Sumner
Here's Paul Krugman in 2013: Joe Stiglitz has an Opinionator piece arguing that inequality is a big factor in our slow recovery. Joe is an insanely great economist, so everything he says should be taken seriously. And given my political... MORE

When the straightforward interpretation seems crazy

Economic Philosophy
Scott Sumner
I've recently been working my way through a long set of 2008 blog posts by Eliezer Yudkowsky. It starts with an attempt to make quantum mechanics seem "normal," and then branches out into some interesting essays on philosophy and science.... MORE

Charles Cooke's lame dismissal of left wing nerds

Politics and Economics
Scott Sumner
Here's Charles Cooke in the National Review: One part insecure hipsterism, one part unwarranted condescension, the two defining characteristics of self-professed nerds are (a) the belief that one can discover all of the secrets of human experience through differential... MORE

Economics: Truer than it seems

Macroeconomics
Scott Sumner
One thing that economists and non-economists have in common is that they underestimate the power of economic theory. More specifically, they aren't able to accurately connect the predictions of economic theory with the behavior that they (wrongly) think they observe... MORE

If something can't go on forever, it will

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
You may recall a famous saying by Herb Stein: If something can't go on forever, it won't. I don't quite believe that, although I must admit that Stein has me beat on logic. But I've noticed that when people say... MORE

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