For 2022-12-05 Mo
Slaby: Sounds dire. Examples? What does it even mean? Is the state of the IRS or the failure of FDA and CDC to apply elementary CBA to their COVID response, or the vast Nimbyist restriction on residential and commercial development, or a shortage of asylum hearing officers at the border, or the fixation of "environmentalists" on quantitative targets rather than taxes to reduce demand for CO2 emitting activities, or the reduction of a trickle of H1b visas to a dribble, due to "neoliberal technocrats?" Do such exotic creatures even exist outside the Nikansen Center?
Drezner: NATO was not an existential threat to Russia or even to Putin, before the invasion. Apparently Putin decided -- and who are we to say he was incorrect -- that an independent democratic Ukraine was an existential threat to Putin. Yes it is important to communicate to non-Putin Russia that Ukraine is no existential threat to Russia, only to Putin.
Sahm/FOMS Hopefully, yes. Doesn't this imply however, that the Fed should not announce instrument setting in advance? Maybe the pause should really begins sooner, but the Fed feels the need to warn traders before the actual change is made? Each move should be the setting that with no new information would achieve its target? How does not having intermediate tenor TIPS affect these decisions?
Faroohar: Central banks certainly should not whack wages. They should (becasue they cannot selectively what excess demand item by item) what aggregate demand. And raising short term interest rates is probably the most sector neutral way to whack. Even that is not ideal as it affects housing construction and resale disproportionately. Small countries that can move their real exchange rates have a somewhat broader range of sectors to whack. But the real question is how closely can the central bank whack coincide with the sectors with excess demand? And even that is not quit right. How well does it coincide with demand sector by sector in excess of what is needed to reach equilibrium in relative prices after a shock. How likely is this to be wages?