Limited vision of text-continuation GPT models; crypto in decay; Réne Walter: On Stochastic Libraries; Samantha Hancox-Li: The Illiberal’s Dilemma; John Gruber: If You Come at the King; Ron Amadeo...
"8. Harold James: Says More: " The 1840s were terrible in so many ways. Bad harvests. Hungry Forties. Going by median/mean stature at adulthood, some of the shorter cohorts -- if not the shortest -- of the 19the century were born and raised in the 1830s, 1840s and 1850s. The kids were not alright. Oliver Twists were real (including what's in the book). This probably had long-reaching repercussions.
Janet Yellen via FT "“Economics are not a zero-sum game,” she said…"
I hope at least US politicians are listening.
Harold James: In a more sensible world we would be getting more theory driven data analysis from political scientists, psychologists, sociologists, anthropologists but in the meantime, economists will have to continue the Imperial Project. :)
Hancox Li: Nicely said, but it leaves out the hard part: the appeal of illiberalism within Liberal Democracies. Is Liberalism but the dying embers of the fire of Faith?
There IS no overwhelming case for Central Bank Digital Currencies, but if there were, it would not be an enhanced ability to provide monetary stimulus. Buiter’s premise for this need is faulty. While it is indeed likely that there will be periods in the future when central banks will again need to take active measures to keep inflation up to target, they will not "return" to being limited in their ability by the “zero lower bound.”
-a) The Fed, at least, never reached zero for its FF rate and by paying interest on reserves _prevented_ short term rates from falling to zero.
-b) The Fed had a perfectly good instrument of keeping inflation up to target –- Quantitative Easing, the purchase of long-term liabilities of the government and quasi-government bodies -- which it simply failed to use vigorously enough in a context of making clear that it would "do what it takes" not to undershoot its target.
This is not to say that central banks could not use additional instruments. It would be useful for the US Treasury to issue a series of “Trillionths,” a liability of different tenors whose future value depends on the GDP at the future time. Even if the Fed did not use intervention in this market as a policy instrument, (Scott Sumner argues that it would be appropriate use such intervention to stabilize GDP growth as a policy _ target_) the relationship of the price of the Trillionth vis a vis a debt instrument of the same tenor would provide information on market sentiment about real growth prospects, surely of use to the Fed and everyone else.
The Treasury should also issue additional Treasury Inflation Protected Securities (TIPS), currently available only in 5- and 10-year tenors, at intermediate tenors. Presently, comparison of TIPS with its corresponding non-protected counterpart shows market expectations of inflation over the 5- or 10-year period. Intermediate tenors would show expectations over shorter periods of time, which ought to be of more utility to the Fed for achieving its inflation target.
"8. Harold James: Says More: " The 1840s were terrible in so many ways. Bad harvests. Hungry Forties. Going by median/mean stature at adulthood, some of the shorter cohorts -- if not the shortest -- of the 19the century were born and raised in the 1830s, 1840s and 1850s. The kids were not alright. Oliver Twists were real (including what's in the book). This probably had long-reaching repercussions.
Janet Yellen via FT "“Economics are not a zero-sum game,” she said…"
I hope at least US politicians are listening.
Harold James: In a more sensible world we would be getting more theory driven data analysis from political scientists, psychologists, sociologists, anthropologists but in the meantime, economists will have to continue the Imperial Project. :)
Hancox Li: Nicely said, but it leaves out the hard part: the appeal of illiberalism within Liberal Democracies. Is Liberalism but the dying embers of the fire of Faith?
Buiter:
Free of charge, my post on Radical Centrist:
Trillionths, "Yes;" CBDC, "No"
There IS no overwhelming case for Central Bank Digital Currencies, but if there were, it would not be an enhanced ability to provide monetary stimulus. Buiter’s premise for this need is faulty. While it is indeed likely that there will be periods in the future when central banks will again need to take active measures to keep inflation up to target, they will not "return" to being limited in their ability by the “zero lower bound.”
-a) The Fed, at least, never reached zero for its FF rate and by paying interest on reserves _prevented_ short term rates from falling to zero.
-b) The Fed had a perfectly good instrument of keeping inflation up to target –- Quantitative Easing, the purchase of long-term liabilities of the government and quasi-government bodies -- which it simply failed to use vigorously enough in a context of making clear that it would "do what it takes" not to undershoot its target.
This is not to say that central banks could not use additional instruments. It would be useful for the US Treasury to issue a series of “Trillionths,” a liability of different tenors whose future value depends on the GDP at the future time. Even if the Fed did not use intervention in this market as a policy instrument, (Scott Sumner argues that it would be appropriate use such intervention to stabilize GDP growth as a policy _ target_) the relationship of the price of the Trillionth vis a vis a debt instrument of the same tenor would provide information on market sentiment about real growth prospects, surely of use to the Fed and everyone else.
The Treasury should also issue additional Treasury Inflation Protected Securities (TIPS), currently available only in 5- and 10-year tenors, at intermediate tenors. Presently, comparison of TIPS with its corresponding non-protected counterpart shows market expectations of inflation over the 5- or 10-year period. Intermediate tenors would show expectations over shorter periods of time, which ought to be of more utility to the Fed for achieving its inflation target.