This is a rare event. Both Brad DeLong and Paul Krugman argue that a recent argument by Kevin Warsh and Michael Spence makes no theoretical sense. I disagree. I am sure Warsh and Spence are wrong, but I can make a simple theoretical argument for their conclusion. The argument is that QE causes low non […]
The Fisher Effect would say that steady and low nominal interests would bring down inflation as the real interest rises to its natural level at full employment. OK… nominal interest rates are steady and low and inflation is low. So is it really the Fisher Effect that is bringing down inflation? Just yesterday I posted […]
BY MARK JAMISON (A North Carolina Retired Postmaster). First posted at Save The Post Office The United Parcel Service is very concerned that you might be paying too much for a postage stamp. If you’re wondering why UPS would be worried about something like that, it has to do with the way postal rates are […]
Link to graph The graph shows that inflation expectations are still trending lower. This trend is consistent with the Neo-fisherian view that over time, as the Fed rate stays stuck at a low rate, the expected inflation will trend lower as the real rate seeks to rise to its natural level. We have seen in […]
If you look at the federal deficit as a share of GDP by presidential administration an interesting pattern emerges. Every Republican administration left office with a larger deficit than they inherited. Every Democratic administration left office with a smaller deficit than they inherited. Why should we pay any attention to anything any Republican says about […]
Good Jobs First has just issued a new report analyzing state investment incentive programs open to small and large businesses alike. With the financial support of the Surdna Foundation and the Ewing Marion Kauffman Foundation, Shortchanging Small Business: How Big Businesses Dominate State Economic Development Incentives finds that 70% of the awards and 90% of […]
The New York Times’ report today by Maggie Haberman and Jonathan Martin on Clinton’s, Sanders’s and O’Malley’s speeches last night at the annual Iowa Democratic Party Jefferson-Jackson Dinner includes this: “I’ve been told to stop shouting to end gun violence,” [Clinton] said, repeating a line she has begun using since Mr. Sanders said in the debate that “all […]
Former Secretary of State Hillary Clinton called out Sen. Bernie Sanders (I-Vermont) on Friday over his request that politicians “stop shouting” about gun control. During a speech at the Democratic National Committee’s Women’s Leadership Conference, Clinton implied that Sanders’ comments may even have had a sexist tinge. “I’ve been told to, and I quote, ‘stop shouting’ […]
Brad DeLong talks about how other economists view Fed interest rate policies as “price controls”. Then he makes a comparison to the present situation with on an example of a “price floor” in agricultural products. But are low interest rates a price floor or a price ceiling? If you think that interest rates need to […]