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Scott Sumner: April 2016

An Author Archive by Month (22 entries)

A new study supports The Midas Paradox

Labor Market
Scott Sumner
In my book entitled The Midas Paradox, I argued that FDR's NIRA wage program set back economic recovery by almost 2 years. Prior to the wage increase, industrial production had surged by 57% in 4 months, mostly due to the... MORE

Once again, the Fed was wrong

Monetary Policy
Scott Sumner
About 2 years ago, I predicted that 3% NGDP growth was the new normal. At the time, the Fed predicted significantly higher trend growth (both RGDP and NGDP.) The Fed has a big NGDP problem. It's becoming increasingly clear that... MORE

Here's Matt Yglesias discussing Uber: App-based ride hailing was a game changer in this context, not just because it offered a somewhat better way to get a ride, but because in Uber's earliest cities it exploited loopholes in the way... MORE

A few weeks ago, I did a post pointing to an inconsistency in progressive thought. Progressives worry a lot about low wages in Mexico stealing jobs form Texas, but not at all about a $7.25 minimum wage in Texas stealing... MORE

Market monetarism and market macroeconomics

Economic Methods
Scott Sumner
Here's Scott Aaronson: I love when important decisions fall into the hands of people who constantly second-guess themselves and worry that their own 'tribe' might be mistaken, who are curious about science and have a sense of the ironic and... MORE

Market urbanism in Houston

Regulation
Scott Sumner
Over at TheMoneyIllusion I did a recent post on the Texas economic miracle, which has survived the oil bust. Commenter ChargerCarl directed me to a very interesting slideshow (prepared by Barbara Tennant) on market urbanism in Houston, which is famous... MORE

Rajat recently left the following comment, over at TheMoneyIllusion: Scott, I know you don't like Twitter, but there has been a few exchanges going on about your argument: One between Kocherlakota and Vaidas Urba. Kocherlakota seems to think that although... MORE

For the past seven years, I've been trying to persuade my colleagues that inflation should be removed from macro models. Inflation is often used as a proxy for positive demand shocks, as when economists assume that higher inflation expectations are... MORE

What's the matter with western Virginia?

International Trade
Scott Sumner
The title of this post is a reference to Thomas Frank's "What's the Matter With Kansas?", which analyzed the question of why voters in relatively poor states like Kansas tended to vote GOP, which is (supposedly) against their best interest.... MORE

A tale of two city-states

Monetary Policy
Scott Sumner
It was the best of times; it was the second best of times. It's natural to want to compare Hong Kong and Singapore. They are among the very richest non-oil producers in the world, at least among economies having more... MORE

I recently did a post arguing that it's almost impossible to forecast recessions. Many commenters were surprised by my view, wondering why market monetarism doesn't provide insights into where the economy is going. The simplest answer is that if the... MORE

How government worsened inequality by ignoring the EMH

Finance: stocks, options, etc.
Scott Sumner
I often do posts defending the Efficient Markets Hypothesis. Sometimes it's just fun to debate these ideas. But there are also serious real world costs to ignorance of the EMH. Government pension funds have wasted large amounts of public money,... MORE

Barbara Anderson, RIP

Tax Reform
Scott Sumner
I was saddened to learn that Barbara Anderson recently died: Most important woman in the history of Massachusetts is a high bar. Competitors for the title might include Abigail Adams, a crucial partner and adviser to her husband John in... MORE

This is a response to Bryan's recent post. I've always been a critic of our income tax regime, which is extremely wasteful for all sorts of reasons: 1. Lots of wasteful paperwork. 2. Leads to wasteful expenditures on rent seeking... MORE

The Atlantic, one of America's more respectable publications, has an article entitled "The Pillaging of America's State Universities". Here's the second paragraph: According to the American Academy of Arts and Sciences' recently completed Lincoln Project report, between 2008 and 2013... MORE

David Beckworth has a new podcast series

Economic Education
Scott Sumner
David Beckworth just announced a new series of interviews with monetary economists and journalists. I am honored to be the first podcast released, but bigger names are upcoming: Today is the launch of a new podcast series on macroeconomics called... MORE

The US reminds me on one of those mafia kingpins, who force other drug dealers out of a neighborhood, so that it can monopolize the business. For years, the US has been the leader in trying to close down tax... MORE

Have you ever wondered if you are a progressive? I've come up with a two-part test. If you believe in both of the following propositions, then you qualify as a American progressive, circa 2016: Proposition #1: Free trade with low... MORE

Nationalists are not utilitarians

International Trade
Scott Sumner
Nationalists are not utilitarians, and they often don't care very much about the poorest of the world's poor. Here's an example, from Vox.com: In a new interview with the New York Daily News, Bernie Sanders said something striking -- he... MORE

The First Great Moderation

International Trade
Scott Sumner
I just read a fascinating NBER paper by Joseph Davis and Marc Weidenmier, on the first Great Moderation; from 1841 through 1856: First, both moderations experienced a change in the structure of the economy. The First Great Moderation witnessed the... MORE

Grossman on NGDP shocks as policy indicators

Monetary Policy
Scott Sumner
I'm starting to clean out my office at Bentley, and throw away lots of old journals. (I dread having to soon throw away lots of my old economics books---I'm of the generation that values things more than experiences.) I came... MORE

Extreme outliers: How meaningful are they?

Economic Methods
Scott Sumner
This post is about the way I think about extreme outliers. It's very unscientific, but I hope the comment section will help me to better understand this issue. Suppose you have two variables, X and Y, which are (supposedly) positively... MORE

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