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Scott Sumner: November 2015

An Author Archive by Month (18 entries)

The new left

Economics of Health Care
Scott Sumner
If you have been paying attention to the debate over public policy, you may have noticed that the GOP has moved even further to the right in recent decades, and the (formerly more moderate) Democrats have moved even more dramatically... MORE

Paul Krugman on jobs and GDP

Monetary Policy
Scott Sumner
In the past I've been critical of Paul Krugman's approach to austerity and business cycles. For instance, he argued that austerity in the UK led to slow growth in real GDP. I countered that RGDP is not the right variable... MORE

Ram on overconfidence

Economic Philosophy
Scott Sumner
A commenter named Ram left a brilliant comment over at TheMoneyIllusion. Here it is (emphasis added): I'd contend that the main problem in America is that the public, including its highly educated members, is social-scientifically ignorant. Most people I talk... MORE

Benny Lava sent me an article discussing the German opposition to Mario Draghi's proposed monetary stimulus: But on Monday, Lautenschlaeger broke with normal etiquette to publicly criticize this stance, saying that ever looser monetary policy had its limits and that... MORE

The Fed is above the law

Monetary Policy
Scott Sumner
This post may upset some people, but I am simply trying to describe the world as it is, not as I would wish it to be. I recently spoke with Ryan Hart, who is researching the legal status of Fed... MORE

It seems as though the major central banks are beginning to rethink their assumptions. Here's an ECB official: Monetary policy risks becoming ineffective in a world where growth is sluggish, economies are deeply interconnected and interest rates are already near... MORE

Wage stickiness as a macro problem

Labor Market
Scott Sumner
A commenter recently made these observations: Working in an office, I still don't see the libertarian position on laying people off versus sticky wages. What I have seen is firms tend to lay people off versus larger wage cuts because:... MORE

Is the Fed beginning to see the light?

Monetary Policy
Scott Sumner
For years I've been arguing that trend real GDP growth is lower than the Fed believes, that the new normal of interest rates will be lower than the Fed believes, that rates will again fall to zero in future recessions,... MORE

A commenter named Cameron sent me this interesting exchange from the recent GOP debate: CRUZ "Yes. Now, let's be clear, there is a role for the Federal Reserve -- what the Fed is doing now is it is a series... MORE

My view of macro

Cross-country Comparisons
Scott Sumner
Several other bloggers have recently described how they visualize macro, so I'll play copycat. I see three types of macro, each radically different from the other two: Long run nominal is the easiest to explain, then business cycles, and long... MORE

The ADA seems to have failed

Labor Market
Scott Sumner
I noticed this in a paper by David H. Autor and Mark Duggan: The Americans with Disabilities Act of 1990 (ADA) forcefully articulates this contemporary view of disability: "Physical or mental disabilities in no way diminish a person's right to... MORE

Bernanke on fiscal policy

Fiscal Policy
Scott Sumner
Fiscal policy is the one area where I disagree most strongly with Ben Bernanke. In his new memoir (p. 387), he indicated that he supported Bush's fiscal stimulus of early 2008. But why? Bernanke gives no explanation at all. He... MORE

(The following post is based on a series of very helpful comments left by Patrick Sullivan. Any mistakes are my own. When I ask progressives how "deregulation" caused the 2008 banking crisis, many point to Gramm, Leach, Bliley (1999), which... MORE

Perhaps the most surprising thing about Ben Bernanke's recent memoir is the lack of surprises, at least about what was going on inside the Fed in terms of the monetary policy debate. That's probably a result of the high quality... MORE

A review of DeLong's review of Bernanke

Monetary Policy
Scott Sumner
In my view, old Keynesianism was based on the cognitive illusion that money doesn't matter, at least when interest rates were near zero. By the 1980s that spell was broken, and we had almost all pretty much rejected old Keynesianism,... MORE

100% money?

Monetary Policy
Scott Sumner
Alex Tabarrok points out that Switzerland will have a referendum on a 100% reserve banking system. The details are kind of vague, as is the motivation. It's also odd that this is occurring in Switzerland, which supposedly has a "problem"... MORE

Arnold Kling on "Sumnernomics"

Monetary Policy
Scott Sumner
Here is Arnold Kling: What I wish to point out is that the relationship as depicted is an anomaly with respect to textbook AS-AD, including both Keynesian economics and Sumnernomics. Timothy Taylor refers to the relationship as a Phillips Curve.... MORE

It's not clear what a term like 'natural' actually means. What are "natural foods" for instance? Are they foods free of natural pesticides? Free of artificial pesticides? Are they free of both natural and artificial pesticides? And what if the... MORE

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