I know half of you (two thirds? three quarters?) probably think I'm making too much of this, but I am still frustrated by this "congratulations to Scott Sumner" meme.
First, let's be clear - this is not an NGDP level target, which maybe could be counted as a win for Scott Sumner as an individual. It's just a smarter monetary expansion that ought to act more positively on expectations because there's no fear that the rug will be pulled out from under us if the economy improves.
So here's the question: What prominent economists haven't been calling for more Fed expansion? Maybe John Taylor? I thought he had said something about policy being just right which is sort of the same as not pushing for more expansion. John Cochrane is not a fan.
Who else?
It seems to me the list of prominent economists who have been saying this is massive.
Maybe it's a victory for the blogosphere as a whole, but I think Evans and Woodford probably have more to do with it and they're not in the blogosphere. And ultimately what is being said in the blogosphere has been said in the literature a lot longer.
Friday, September 14, 2012
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Stiglitz and many other left wing Keynesians. Almost every Austrian. All the supply siders...
ReplyDeleteIt is true that most demand side economists have been calling for this, but that wasn't always the case. I do remember when it was basically just the lone voice of Sumner, three or so years ago, calling for this sort of thing; to everyone else the idea that money could be too loose was absolutely preposterous.
Krugman had argued for extreme monetary policy since, at least, his Japan paper.
DeleteToo tight*
ReplyDeletePretty much all Republican economists have been calling for the Fed to abstain (Feldstein) or avoiding the subject (Mankiw). Perhaps they would have changed their tune if Romney were elected, but I doubt it.
ReplyDeleteMatt Yglesias has joined the congratulations to Scott Sumner chorus.
ReplyDeletehttp://www.slate.com/blogs/moneybox/2012/09/13/the_scott_sumner_rally.html
His take seems about right:
But Sumner was really the guy keeping this torch alive during 2009 and 2010 and forcing it, rather than an endless partisan debate about fiscal policy, back onto the intellectual agenda.
It is not that no one else advocated monetary expansion -- see Scott's latest blog where it lists lots of folk. It is that he focused on it, on the necessity of shifting the Fed, and on monetary policy as the underlying problem and put it in a particularly lay-friendly way.
As somebody said, I'll congratulate Sumner as long as I can blame him when it fails (although I'd rather we used a sensible model of the macroeconomy, but that's not going to happen).
ReplyDeleteAs somebody said, I'll congratulate Sumner as long as I can blame him when it fails...
DeleteI'm with you, Unlearningecon. Unlike Daniel, I recognize the sense in which Sumner should be proud of what he's done. And like you, I recognize the sense in which Sumner should be horrified of what he's done (though perhaps you and I differ as to why it will fail).
I think we have a crossover in that we both think NGDP targeting is a bubble machine.
Delete