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Scott Sumner: September 2016

An Author Archive by Month (20 entries)

Missing moods at the Boston Globe

Economics of Crime
Scott Sumner
Polls show that 58% of Americans favor the legalization of marijuana. Even Texans support it. But an initiative to legalize pot in (very liberal) Massachusetts may fail. One reason is anti-legalization editorials like the following, in the highly influential Boston... MORE

Who is Peter Navarro?

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Tyler Cowen linked to a paper by Peter Navarro, which discusses Trump's economic plan. To put it simply, it's a complete mess. Here are just a few examples: Under WTO rules, any foreign company that manufactures domestically and exports goods... MORE

Bernanke on the Bank of Japan

Monetary Policy
Scott Sumner
Here's Ben Bernanke on the recent moves by the Bank of Japan: The most surprising, and interesting, part of the announcement was the decision to target the ten-year JGB yield. As I noted in a previous piece on targeting longer-term... MORE

I recently listened to a podcast where David Beckworth interviewed Cardiff Garcia, of FT Alphaville. I agreed with most of the things Garcia had to say, including his observations on the recent growth slowdown. He discussed the way that top... MORE

Here's Matt O'Brien: Libertarian presidential candidate Gary Johnson is a friendly guy, seems pretty moderate. But he could tank the economy. That's what trying to balance the budget all at once would do. Which, of course, is what Johnson says... MORE

Democracy: Trust the system, not the leaders

Political Economy
Scott Sumner
Like Bryan Caplan, I have a strong distaste for politicians. Especially this year. But I have a more favorable view of democracy than Bryan does. I see democracy as being superior to all other systems, for standard "wisdom of crowds"... MORE

The oil price collapse: Tax cut or reallocation?

Energy, Environment, Resources
Scott Sumner
Just about all economists agree that a sudden dramatic increase in oil prices is likely to be bearish for the US economy. Of course that's not always the case (for "never reason from a price change" reasons), but it's usually... MORE

Globalization is not the problem, it's the solution

International Trade
Scott Sumner
Here's Dani Rodrik: A Chinese student once described his country's globalization strategy to me. China, he said, opened a window to the world economy, but placed a screen on it. The country got the fresh air it needed -- nearly... MORE

The Wall Street Journal has a very interesting story on the BOJ, which faces an important policy decision on Wednesday: Until recently, Bank of Japan Gov. Haruhiko Kuroda managed to keep a fragile majority on the nine-member board in favor... MORE

The Fed is planning for failure

Monetary Policy
Scott Sumner
Over at Bloomberg.com, Narayana Kocherlakota has a nice post discussing the Fed's plan for the next recession. He provides some graphs showing alternative policy paths: Kocherlakota comments: She [Yellen] views this black-line outcome as a demonstration that the Fed's existing... MORE

I don't follow fiscal policy closely, because I don't think it impacts the business cycle. But most economists disagree with me, and many are recommending fiscal stimulus. I argue that fiscal stimulus has no demand-side effects when the Fed is... MORE

For several years I've been gradually pulling my hair out as I read one pundit/commenter after another claim that since the Fed is currently struggling to hit its 2% inflation target, there's no point in setting a higher inflation target.... MORE

Ryan Avent asks some very good questions

Monetary Policy
Scott Sumner
Ryan Avent, who writes for The Economist, sent me an email with some very good questions about monetary policy rules. (He was a moderator at the recent Mercatus/Cato conference on monetary policy rules.) Ryan allowed me to reprint them here,... MORE

Brexit is not about Britain, #2

Monetary Policy
Scott Sumner
It's less that 3 months since the Brexit vote, and thus too early to form any firm conclusions. But one recent article points to the growing belief that Britain may have dodged a bullet, which hit the eurozone instead: Brexit... MORE

My paper at the monetary rules conference

Monetary Policy
Scott Sumner
Today I will be presenting a paper at a Mercatus/Cato conference on monetary policy rules. Here I'd like to summarize my key themes: 1. The past 10 years have destroyed the pre-2008 consensus on monetary policy. Everything is up in... MORE

How would we know if wages were sticky?

Labor Market
Scott Sumner
I've done a lot of posts on wage stickiness, but misconceptions keep popping up. The sticky wage theory of the business cycle is based on the notion that only a fraction of wages get adjusted each period. This leads to... MORE

The interest rate fallacy

Monetary Policy
Scott Sumner
There is a common fallacy that lower interest rates are expansionary. Where does this fallacy come from? I can think of two true facts, each of which contributes to this fallacy. 1. The true fact that if I am thinking... MORE

Reply to Kocherlakota

Monetary Policy
Scott Sumner
I recently did a post over at MoneyIllusion, arguing against the elimination of currency. I suggested that this would have a disproportionate impact on the poor, who often lack access to banking facilities. It would also reduce privacy; the government... MORE

Brexit uncertainty and Brexit itself

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Is it too early to evaluate the impact of Brexit? I'd say so, given that Brexit will not occur until at least 2019. How about the impact of Brexit uncertainty, which just a few weeks ago many (most?) pundits were... MORE

Vox has a new article on political correctness: Academic freedom is the sine qua non of higher education. Students ought to be challenged, even made uncomfortable, in order to learn in deep and meaningful ways. And, of course, collegiate education... MORE

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