EconLog small logo

Scott Sumner: July 2015

An Author Archive by Month (17 entries)
The government just announced revised real GDP figures for the past few years, showing even lower growth than previously estimated. I am traveling now so I'm going to estimate these growth rates w/o a calculator. Please correct me if I... MORE

Predicting failure

Monetary Policy
Scott Sumner
Lars Svensson has argued that the Fed should "target the forecast", which means they should adjust policy so that their predicted outcome is also their targeted outcome. Information accidentally leaked by the Fed indicates that they are not doing this,... MORE

Race and progressivism

Politics and Economics
Scott Sumner
Pat Buchanan used to complain about imports from Asian and Hispanic economies, but was strangely silent about our large trade deficits with mostly white northern Europe. Donald Trump makes similar complaints. Now Kevin Williamson says that Bernie Sanders likes to... MORE

Paul Krugman on the minimum wage

Labor Market
Scott Sumner
Paul Krugman recently had this to say on the minimum wage: Until the Card-Krueger study, most economists, myself included, assumed that raising the minimum wage would have a clear negative effect on employment. But they found, if anything, a positive... MORE

Paul Krugman doesn't understand why people think government is bad: Why, exactly, are these public functions unquestioned bywords for "something bad"? Maybe I'm living a sheltered life here in central New Jersey, but I don't find the Post Office a... MORE

People tend to be overconfident in their views. They are overconfident about their political views, their religious views, their views on global warming, even their views on sports. That's just human nature. And people are especially overconfident about their understanding... MORE

Weak currencies don't cause trade surpluses

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
I'm seeing a lot of people claiming that Germany benefits from the euro's impact on its trade balance. The argument seems to be that the euro is weaker than the Deutschmark would be, and that this explains Germany's big trade... MORE

Rashomon at the Financial Times

Eurozone crisis
Scott Sumner
A crime has been committed in Brussels. But who is the victim? Gideon Rachman of the Financial Times says Germany is the victim: Europe woke up on Monday to a lot of headlines about the humiliation of Greece, the triumph... MORE

Paul Krugman on Greece and Germany

Eurozone crisis
Scott Sumner
The Syriza Party took power in January of this year, and immediately began to issue one inflammatory statement after another, demanding an end to the troika's austerity program. American bloggers were divided on the effectiveness of the Syriza strategy, with... MORE

Why is Greece such an economic success?

Cross-country Comparisons
Scott Sumner
Greece is widely viewed as an economic basket case. This recent article in the Financial Times discusses some fanciful proposals to fix the Greek economy. I don't doubt that Greece has performed poorly in recent years, but in one little... MORE

In talking to other economists I often hear concerns that NGDP targeting could occasionally lead to excessive inflation. Oddly, I don't hear the opposite complaint, although there would be just as many periods of below average inflation as above average... MORE

This report in the Financial Times caught my attention: George Osborne has delivered Britain's first radical Tory Budget for nearly 20 years, announcing huge welfare cuts offset by a higher minimum wage in a bid to create a "high wage,... MORE

Bob Murphy has a post criticizing me for being inconsistent on the subject of interest rates and the stance of monetary policy. Sometimes I say that changes in interest rates don't tell us anything about the stance of monetary policy.... MORE

Greece: What are the markets telling us?

Monetary Policy
Scott Sumner
The Greeks have voted no in today's referendum, which makes it more likely (though not certain) that Greece will leave the euro. Some economists believe that this action would help the Greek economy. Devaluation would be an expansionary monetary shock,... MORE

The answer is probably yes (and the scare quotes head off complaints that big impersonal governments don't actually have human feelings.) The administration has clearly been upset that the Eurozone isn't doing more to help Greece. They complain that a... MORE

I often see Fed officials claiming that the fall in unemployment means that they need to raise interest rates. Sometimes this is based on "Phillips Curve" thinking---the (false) idea that inflation is caused by a booming economy. In fact, the... MORE

I first got into blogging in 2009 out of frustration over Fed policy. The US obviously had a huge demand shortfall, and the Fed wasn't doing enough to address the problem. Indeed I believe the Fed caused the huge demand... MORE

Return to top