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Scott Sumner: August 2016

An Author Archive by Month (15 entries)
In this post I'm going to ask for your advice. I'd like to know why the public, and even the more sophisticated pundits, have so much trouble understanding monetary offset. Stephen Kirchner sent me a Bloomberg piece discussing the sudden... MORE

The Monster in the Mirror

Monetary Policy
Scott Sumner
I seem to vaguely recall a horror story where the protagonist searches everywhere for the monster, and at the end sees himself in the mirror, realizing that he is the monster. If there is no such story, there should be.... MORE

In recent months the rest of the world has finally begun to accept the market monetarist view that interest rates are likely to stay low indefinitely. But there's still a lot of confusion as to the reasons why. The Financial... MORE

NGDP targeting in Australia?

Monetary Policy
Scott Sumner
There is a sudden interest in NGDP targeting in Australia. Here's Greg Jericho, in the Guardian: For the most part economic debate can revolve around the margins, with few bold ideas promulgated. This week however, Senator Nick Xenophon proposed a... MORE

Tyler Cowen on NGDP targeting

Monetary Policy
Scott Sumner
Here's Tyler Cowen: The thing is this: whether rationally or not, the American public hates higher rates of price inflation. Perhaps they mis-sample or mis-estimate prices, or perhaps the higher prices really do erode their real wages in a way... MORE

This post will be about macro theory, but let's begin with a related example. You are a libertarian and your best friend is also a libertarian. You tend to see eye to eye on most issues, favoring small government. Then... MORE

Saving is not a problem

Macroeconomics
Scott Sumner
I recently came across a WSJ article that is a gold mine of teachable moments for EC101 students: KORSCHENBROICH, Germany--Two years ago, the European Central Bank cut interest rates below zero to encourage people such as Heike Hofmann, who sells... MORE

The new "voodoo"

Macroeconomics
Scott Sumner
Here is Arnold Kling: John Cochrane writes, Economics is a work in progress. But it is certainly brand-new, made-up-on-the spot economics, designed to buttress policies decided on for other reasons. He is describing the economic analysis that claims that policies... MORE

Why the monetary policy pessimism?

Monetary Policy
Scott Sumner
I've recently noticed a lot of pessimism about what monetary policy can accomplish. For instance, if I discuss a higher inflation target, people will say, "what makes you think the Fed could hit a higher inflation target? After all, they... MORE

Raise your hand if you are a libertarian. Now raise your hand if you think Fidel Castro is a communist. I see exactly the same number of hands in the air. Raise your hand if you are a libertarian. Now... MORE

Why the new old Keynesians are wrong about trade

International Trade
Scott Sumner
Ramesh Ponnuru directed me to a Greg Ip article, discussing the strange new fascination with protectionism within the Keynesian community. A few decades ago the "dark underworld" of Keynes's General Theory had gone out of favor. Economists still accepted "Keynesian"... MORE

The Fed is caught in a vise

Monetary Policy
Scott Sumner
I often read the business press, which has a lot of articles on Fed policy. One recurrent theme is that the Fed is sort of kowtowing to the markets. Here's a typical Bloomberg article: It's the Greenspan put gone wild.... MORE

"Fund" and games with fiscal policy

Fiscal Policy
Scott Sumner
I recently did a post suggesting the new political divide in the world is not small and big government, but rather open and closed societies. A new Bloomberg article reminded me about how far to the left the GOP has... MORE

I now consider myself to be a Libertarian

moral reasoning
Scott Sumner
I've always been a small "L" libertarian, but have had an up and down relationship with the Libertarian Party. I was a member when younger, but then let the membership lapse. I continued to vote Libertarian, but mostly to try... MORE

What if everything doesn't go as expected?

Fiscal Policy
Scott Sumner
I like a good contrarian argument. So I was open to Ryan Avent's post on Trump's fiscal policy proposals (which combine massive tax cuts with big spending increases.) On the demand side, permanent tax cuts for the very rich would... MORE

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