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Scott Sumner: April 2017

An Author Archive by Month (17 entries)

Generals fighting the last war

Fiscal Policy
Scott Sumner
During 2008, the Fed became increasingly concerned about high inflation, which was partly driven by rising oil pr ices. This caused them to refrain from rate cuts between April and November, resulting in an unintentional tightening of monetary policy. They... MORE

The title of this post is actually two questions in one. One issue is technical, why don't wages rise to restore equilibrium? And the second is sociological, haven't we all been reading that there are no longer jobs available for... MORE

Ezra Klein on the Singapore health care miracle

Economics of Health Care
Scott Sumner
Ezra Klein has a good essay on the Singapore health care system. He starts off with the conservative case for the Singapore system, quoting the AEI: What's the reason for Singapore's success? It's not government spending. The state, using taxes,... MORE

Trump and Le Pen

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
The stock market behaved rather strangely in the period before and after the November elections. Before the election, stocks reacted negatively to each Trump surge in the polls, and stock futures fell late in the evening of November 8th, immediately... MORE

Bretton Woods as a "guardrails" approach to monetary policy

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
I now favor a monetary policy rule that I have dubbed the "guardrails" approach, although a more accurate metaphor might refer to the beeper you hear if you are about to hit a car in the front or rear when... MORE

The "national defense" argument

International Trade
Scott Sumner
The Financial Times reports that the Trump administration is considering steel tariffs: The US has set the stage for a global showdown over steel, launching a national security investigation that could lead to sweeping tariffs on steel imports in what... MORE

Let them eat quality?

Growth: Consequences
Scott Sumner
Bruce Sacerdote has a very interesting new NBER working paper looking at growth in American consumption, income and wages. His study was motivated by the apparent disconnect between reports of stagnant real income and what seems to be rapid improvements... MORE

Does trade with China cost jobs?

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
Trade with China undoubtedly costs jobs in specific industries. However there is no evidence that it has any impact on the overall number of jobs in the US. Last year I did a number posts criticizing a study by Autor,... MORE

Avoid procyclical inflation

Monetary Policy
Scott Sumner
A recent paper by Michael T. Kiley and John M. Roberts (both of the Federal Reserve Board) looks at option for improving monetary policy in light of the zero bound problem: Nominal interest rates may remain substantially below the averages... MORE

The public only thinks it likes low inflation

Politics and Economics
Scott Sumner
Polls show that the public thinks it likes low inflation. But it doesn't. Thinking you like low inflation is reasoning from a price change, which is almost always a bad idea. Thus we should be very skeptical when the public... MORE

What housing supply glut?

Microeconomics
Scott Sumner
Kevin Erdmann's blog has made me much more aware of the very strange way we look at housing. Here's an example from the Financial Times: More than a million new apartments have sprung up across the US in a post-crisis... MORE

Murphy and Smith on NGDP and politics

Politics and Economics
Scott Sumner
Ryan Murphy has a post discussing a paper he wrote with Taylor Leland Smith, testing my claim that sharp NGDP declines lead to governments with statist polices: In a forthcoming paper at Review of Austrian Economics, co-authored with Taylor Leland... MORE

Supply and demand both matter

Macroeconomics
Scott Sumner
There's an unfortunate tendency for economists to align themselves into "supply-side" and "demand-side" camps. Many conservatives in Europe denied that the ECB's tight money policy caused a double-dip recession, leading to a dramatic rise in unemployment between 2008 and 2013.... MORE

Might Trump actually end up promoting liberalism?

Labor Mobility, Immigration, Outsourcing
Scott Sumner
I suppose the title to this post sounds like wishful thinking. And perhaps it is. Nonetheless, I am seeing increasing signs that Trump's unpopularity may be tending to discredit some of his policy ideas. Here's The Economist: EU deals with... MORE

I'm starting to clean out my office, and I keep finding interesting old articles that I clipped out of the newspaper. Some of the stuff from 2008 and 2009 is absolutely mind-blowing. Here's a January 31st, 2009 article from The... MORE

What were the "costs and risks" of QE?

Monetary Policy
Scott Sumner
One of the puzzles of the Great Recession is why the Fed did not move more aggressively to promote recovery in NGDP growth and/or inflation. Many observers, including Christina Romer and Lawrence Ball, noted that the Fed's passivity seemed to... MORE

Heterodoxy at the AER

Alternative Economics
Scott Sumner
Years ago I used to enjoy reading Scientific American. Once in and a while, however, they did articles on economics. It was clear that the editors of Scientific American had a very low opinion of orthodox economics, as they would... MORE

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