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Scott Sumner: July 2016

An Author Archive by Month (20 entries)

The new political divide

Free Markets
Scott Sumner
The Economist has a very good article describing how the 20th century's left/right political divide is now being replaced by a split between those who favor and oppose an open society: IS POLAND'S government right-wing or left-wing? Its leaders revere... MORE

Reasoning from a price change, example #213

Monetary Policy
Scott Sumner
Noah Smith has a new post on interest rates: Traditionally, macroeconomists have believed that low interest rates encourage inflation. But first Japan, and now the U.S. and Europe have kept rates low for years now, and inflation has stayed stubbornly... MORE

Pro and Contra Gauti Eggertsson

Labor Market
Scott Sumner
Rajat directed me to a post by Miles Kimball, entitled "Pro Gauti Eggertsson". He discusses Eggertsson's views on the role of inflation expectations in the recovery from the Great Depression. Like Miles, I'm a big fan of Eggertsson's work on... MORE

Tyler Cowen on low interest rates

Macroeconomics
Scott Sumner
Tyler Cowen has a new Bloomberg column: Maybe Negative Yields Are a Sign of Prosperity Just when it seemed that negative yields could not spread any further, they did. Corporate bonds paying negative interest rates now account for about $512... MORE

Remorse

Economics of Crime
Scott Sumner
Tyler Cowen linked to a Wonkblog post that suggested pot legalization has not had the negative effects that drug warriors predicted: National surveys have shown that teen marijuana use rates are falling across the country. But there haven't been many... MORE

The Fed's psyche

Monetary Policy
Scott Sumner
Tim Duy always has something thoughtful to say about the Fed. This comment in his latest Bloomberg column caught my eye: But note too that Dudley looks disapprovingly on the 1994-1995 cycle. For policymakers at the Fed, that cycle has... MORE

Noah Smith and Zachary David refute the EMH

Monetary Policy
Scott Sumner
Suppose markets are efficient at pricing assets. And suppose everyone believes they are efficient. In that case (some argue) no one would have an incentive to gather information, and trade on that information. But in that case, speculators and arbitragers... MORE

Free, good and happy

Cross-country Comparisons
Scott Sumner
Tyler recently linked to a study that used data on happiness in 22 OECD countries (all majority white). Only 6 countries scored above 8.00 in the happiness survey: Denmark: 8.35 USA: 8.32 New Zealand: 8.22 Australia: 8:05 Switzerland: 8.01 Finland:... MORE

Uncertain about uncertainty

Monetary Policy
Scott Sumner
I've always been a bit skeptical when people point to "uncertainty" as the cause of economic distress. High unemployment? Uncertainty about ObamaCare! More often, the problem is bad monetary policy, and the only "uncertainty" is just how much NGDP instability... MORE

Zachary David on NGDP futures targeting

Monetary Policy
Scott Sumner
Jim S. directed me to a Zachary David post criticizing my NGDP futures targeting proposal. He links to my Mercatus paper on the plan, but seems to ignore its contents. Most of the objections that he raised are answered in... MORE

Decentralization in Turkey

Political Economy
Scott Sumner
I've always been a fan of Swiss-style decentralization. The following is from an Economist article on Turkey: Countries such as India and China have witnessed similar urban explosions, but Turkish cities stand out for also offering an impressive quality of... MORE

The costs of inflation and recession

Monetary Policy
Scott Sumner
Noah Smith has a good post on the costs of inflation and recession, but I don't quite agree with this: Many people seem to think that inflation and recession are equal, symmetric dangers. This is implicit in the idea of... MORE

The Irish miracle

Macroeconomics
Scott Sumner
There's been a lot of recent discussion of the new GDP statistics out of Ireland, which show 2015 RGDP growth of 26.3% and NGDP growth of 32.4%. Almost everyone agrees that the data is somewhat fishy, but it's not clear... MORE

I'm happy to see that Bryan Caplan is planning a new book on poverty, as his forthcoming book on education already looks like it will be a classic. He asked for "constructive criticism" in a recent blog post, so I'll... MORE

Here's Neil Irwin of the NYT, expressing some rather unoriginal views that you might see in 100 other media outlets: What lesson should a card-carrying member of the economic elite take from the success of Donald J. Trump, and British... MORE

Peter Conti-Brown on the Fed

Law and Economics
Scott Sumner
I just finished Peter Conti-Brown's excellent new book on the Fed. Brown looks at the Fed from the perspective of a political scientist and legal scholar, not an economist, and this produced a lot of interesting and fresh insights. Is... MORE

The second domino

Money
Scott Sumner
Soon after the Brexit vote was announced, I made this comment: This time around the UK was probably hurt somewhat; British stocks are down around 4% as I write. But French and German stocks are down 7% to 8%. The... MORE

Aggregate demand is not consumption

Monetary Policy
Scott Sumner
I occasionally see commenters talk about how monetary stimulus and/or low interest rates would merely shift demand from the future to the present. That claim never made any sense to me. Now I see that Paul Krugman is equally perplexed:... MORE

Krugman on monetary offset and China trade

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Back in February I wrote a very long post, which was somewhat skeptical of a study (by Autor, Dorn and Hanson) of the impact on Chinese exports on US employment, during the period from 1990 to 2007. Other pundits seemed... MORE

Supply and demand: Handle with care

Labor Market
Scott Sumner
I recently did a post that discussed a "shortage" of skilled labor in Spain, despite 20% unemployment. Companies were having trouble filling positions such as nurses, computer programmers, etc. Several commenters suggested this made no sense; if there was a... MORE

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