Milton Friedman on old fallacies that never die at central banks
12 Feb 2020 Leave a comment
in business cycles, financial economics, great depression, inflation targeting, macroeconomics, Milton Friedman, monetary economics, politics - New Zealand, Public Choice
Finn Kydland on economic policy
22 Jan 2020 Leave a comment
in development economics, economic growth, economic history, economics of bureaucracy, Edward Prescott, entrepreneurship, Euro crisis, fiscal policy, global financial crisis (GFC), great recession, growth disasters, growth miracles, income redistribution, industrial organisation, inflation targeting, international economics, labour economics, law and economics, macroeconomics, monetary economics, property rights, Public Choice, public economics, rentseeking, Robert E. Lucas Tags: game theory, real business cycle theory
Does forward guidance work? Eugene Fama
03 Jan 2020 Leave a comment
in applied price theory, business cycles, econometerics, economic history, economics of information, financial economics, inflation targeting, macroeconomics, monetarism, monetary economics Tags: monetary policy
Thomas Sargent on the conquest of American inflation
03 Oct 2019 Leave a comment
in budget deficits, business cycles, economic growth, economic history, fiscal policy, history of economic thought, inflation targeting, macroeconomics, monetary economics, politics - USA, Public Choice, unemployment Tags: real business cycles, unemployment and inflation
Money For Nothing: Inside the Federal Reserve – Trailer
21 Oct 2018 Leave a comment
in business cycles, economic growth, economics of bureaucracy, global financial crisis (GFC), great recession, inflation targeting, macroeconomics, monetary economics, politics - USA, Public Choice Tags: economics of central banking
Thomas Humphrey on the cost push theory of inflation fallacy that will not die
15 May 2018 Leave a comment
in inflation targeting, macroeconomics, monetary economics Tags: cost-push inflation
Monetary Policy: The Best Case Scenario
11 Aug 2017 Leave a comment
in business cycles, economics, inflation targeting, macroeconomics, monetarism, monetary economics Tags: monetary policy
NZ inflation rate since 1991 with 1% CPI bias adjustment
13 Sep 2016 Leave a comment
in economic history, inflation targeting, macroeconomics, monetary economics, politics - New Zealand Tags: CPI bias, inflation rate
The inflation rate is overstated by about 1% each year because of difficulties in measuring new goods entering the consumer price index and improvements in the quality of existing goods in the consumer price index. With that adjustment of 1% in the chart below, a common measure of that bias, New Zealand has had zero to negative inflation for four years
Source: Reserve Bank of New Zealand Key Statistics.
One of the reasons for an inflation target band of 1 to 3% is an inflation rate of 1% is actually an inflation rate of 0%.
% industrialised countries at zero or near zero central bank interest rates
04 Feb 2016 Leave a comment
in business cycles, currency unions, Euro crisis, global financial crisis (GFC), great recession, inflation targeting, macroeconomics, monetarism, monetary economics Tags: central banks, liquidity trap, monetary policy
Greg Mankiw on the zero influence of modern macroeconomics on monetary policy making
17 Sep 2015 1 Comment
in business cycles, history of economic thought, inflation targeting, macroeconomics, managerial economics, monetarism, monetary economics, organisational economics Tags: Alan Blinder, Alan Greenspan, credible commitments, Greg Mankiw, modern macroeconomics, monetary policy, neo-Keynesian macroeconomics, new classical macroeconomics, The Fed, timing inconsistency
Two of my brothers studied economics in the early 1970s and then went on to different paths in law and computing respectively. If Greg Mankiw is right, my two older brothers could happily conduct a conversation with a modern central banker. Their 1970s macroeconomics, albeit batting for memory, would be enough for them to hold their own.
Source: AEAweb: JEP (20,4) p. 29 – The Macroeconomist as Scientist and Engineer – Greg Mankiw (2006).
I would spend my time arguing with a central banker that Milton Friedman may be right and central banks should be replaced with a computer. The success of inflation targeting is forcing me to think more deeply about that position. In particular the rise of pension fund socialism means that most voters are very adverse to inflation because of their retirement savings and that is before you consider housing costs are much largest proportions of household budgets these days.
Recent Comments