Nominal wage growth continues strong; Robert Reich reflects; Romer & Romer on applied Fed-watching; generative AI, First Republic, the mouse strikes back, and the Taylor rule...
Romer and Romer: "Many years ago, someone referred to what we do as the “literary” approach. It was clear they didn’t mean it as a compliment." Whoever said that doesn't know what scientific means and probably thinks that it is the same as scientistic. That person should be made to lick the inside door handle of a local Burger King Washroom and then wash their mouth with soap. After that they should be sent to Deirdre McCloskey for a nice tongue lashing.
Bernstein. Oh for a Republican party that cared enough about growth and innovation to overcome it's nativists. But I don't count on it. Democrats will have to do this.
Stiglitz: Unless Powell is planning to abandon the Fed's targets, the Banking system IS stable. If losses from unwisely having invested short term deposits in longer term fixed rate assets threaten to make banks "unstable," the Fed might have to do a quick U turn to keep that from depressing inflation and employment below target. But that's its job.
Yes, it was a terrible open letter, but it was also terrible that another group didn’t write complaining about Fed refusing to just do what is takes to carry out its mandate. Inflation AND employment were below target and TIPS markets knew it. Why wasn’t the Fed getting pressure from sensible people?
Romer and Romer sound pretty common sense. Is anyone disputing for example that the increase in the FF rate in March 22 was and was intended to be anti-inflationary?
Open Letter To Ben Bernanke: That stirs up bad memories, Brad. On a Friday evening to boot. But something I had not noticed back then caught my eye and made me chuckle a bit. At the bottom of the Letter: "(Institutional Affiliations are for Information Only)". In other words, they can be misconstrued? For what? Anyway: Ben Bernanke 1: Open Letter 0.
This Romer and Romer is as beautifully done -- if not better -- as the original one; had loved it in grad school. Here's how I understand the estimated effect on, say, real GDP. It is the extent of damage that is possible due to a monetary policy shock. But the effect is NOT by how much real GDP will ACTUALLY fall. Other things can move real GDP, even upward, after the shock. An actual contraction of that size may not be guaranteed. If real GDP is found to be expanding in the aftermath for whatever reason, one would say that it did so DESPITE that contractionary impulse it was made to suffer by monetary policy. I hope I got this right.
Romer and Romer: "Many years ago, someone referred to what we do as the “literary” approach. It was clear they didn’t mean it as a compliment." Whoever said that doesn't know what scientific means and probably thinks that it is the same as scientistic. That person should be made to lick the inside door handle of a local Burger King Washroom and then wash their mouth with soap. After that they should be sent to Deirdre McCloskey for a nice tongue lashing.
Is the employment cost index a price index? Same job over time wage? or is t affected by shifts in which jobs are costed?
Bernstein. Oh for a Republican party that cared enough about growth and innovation to overcome it's nativists. But I don't count on it. Democrats will have to do this.
Stiglitz: Unless Powell is planning to abandon the Fed's targets, the Banking system IS stable. If losses from unwisely having invested short term deposits in longer term fixed rate assets threaten to make banks "unstable," the Fed might have to do a quick U turn to keep that from depressing inflation and employment below target. But that's its job.
Yes, it was a terrible open letter, but it was also terrible that another group didn’t write complaining about Fed refusing to just do what is takes to carry out its mandate. Inflation AND employment were below target and TIPS markets knew it. Why wasn’t the Fed getting pressure from sensible people?
Romer and Romer sound pretty common sense. Is anyone disputing for example that the increase in the FF rate in March 22 was and was intended to be anti-inflationary?
Open Letter To Ben Bernanke: That stirs up bad memories, Brad. On a Friday evening to boot. But something I had not noticed back then caught my eye and made me chuckle a bit. At the bottom of the Letter: "(Institutional Affiliations are for Information Only)". In other words, they can be misconstrued? For what? Anyway: Ben Bernanke 1: Open Letter 0.
This Romer and Romer is as beautifully done -- if not better -- as the original one; had loved it in grad school. Here's how I understand the estimated effect on, say, real GDP. It is the extent of damage that is possible due to a monetary policy shock. But the effect is NOT by how much real GDP will ACTUALLY fall. Other things can move real GDP, even upward, after the shock. An actual contraction of that size may not be guaranteed. If real GDP is found to be expanding in the aftermath for whatever reason, one would say that it did so DESPITE that contractionary impulse it was made to suffer by monetary policy. I hope I got this right.