tag:blogger.com,1999:blog-1740670447258719504.post6516116665610001961..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: Ryan Murphy on me and the whole Hayek/Sumner thingEvanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-1740670447258719504.post-52304916382441258712012-06-20T20:45:05.674-04:002012-06-20T20:45:05.674-04:00I'd support NGDP stabilisation under particula...I'd support NGDP stabilisation under particular conditions. Whether NGDP should grow at 0% or 5% is just quibbling on the margin. Are wages sticky? How sticky? Can we do something about it? What effect to expectations have? Should we strive to preserve preexisting trends or establish new ones? What about population growth or maybe total factor productivity growth (Selgin)? What effect will there be on the capital structure? Etc. Etc.<br /><br />So far as I am aware, Hayek never really addresses all these marginal issues. It's hard to get a clear reading on where he would stand on the practical issues of today's monetary policy. However, fundamentally, he understands the need for some kind of stabilisation of the 'money stream' in the much the same way Sumner does for NGDP.Lee Kellyhttp://criticalrationalism.netnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-2276446242487509972012-06-20T14:05:37.111-04:002012-06-20T14:05:37.111-04:00Thanks - I'm no expert on these proposals. I w...Thanks - I'm no expert on these proposals. I was under the impression that it was NGDP growth to match productivity change (I was a little curious what is done with workforce growth) and maintain price stability.<br /><br />You're probably right. However it's conceived, this clearly is not what the market monetarists are proposing.Daniel Kuehnhttp://www.factsandotherstubbornthings.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-73764882248791101752012-06-20T14:01:00.839-04:002012-06-20T14:01:00.839-04:00My understanding of the productivity norm is that ...My understanding of the productivity norm is that it would be 0% NGDP growth with price deflation to match productivity growth. NGDP may be allowed to increase to match workforce growth.robhttps://www.blogger.com/profile/04682517711551179057noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-53932034859676420582012-06-20T12:44:41.807-04:002012-06-20T12:44:41.807-04:00Oh to clarify... I'm not sure if rob is saying...Oh to clarify... I'm not sure if rob is saying this or not, but I'm saying it... 5% trend level targeting is <i>not</i> a productivity norm target (that would be nice though, wouldn't it?).Daniel Kuehnhttp://www.factsandotherstubbornthings.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-68827142352869932382012-06-20T12:43:08.958-04:002012-06-20T12:43:08.958-04:00Commenter rob, from the other post, gets it. He wr...Commenter rob, from the other post, gets it. He <a href="http://factsandotherstubbornthings.blogspot.com/2012/06/its-not-hayek-that-i-have-trouble.html?showComment=1340210009896#c4746997799867873793" rel="nofollow">writes</a> :<br /><br /><i>"The logic of the 5% v 0% is to prevent prices having to fall as productivity rises plus to have a bit of inflation to allow relative prices to adjust without any actual prices falls being necessary.<br /><br />By the time of "denationalization of money" Hayek seems to have accepted the first part of this argument as he favors Prices Level Stability, which would involve increasing the money supply to match productivity growth.<br /><br />I think the second part, increasing the money supply in order to have planned inflation , is more controversial. Using inflation to allow relative prices to adjust is very un-Austrian and I'm surprised that Selgin and Horowitz etc don't take a stronger stance on that point."</i><br /><br />I couldn't agree more. This is absolutely not about categorical differences or Rothbardians vs. non-Rothbardians. And if the shoe don't fit, then don't mistake me for telling you to wear it.<br /><br />I am surprised by the same thing rob is. I am also surprised that Sumner is being so buddy-buddy with Hayek.Daniel Kuehnhttp://www.factsandotherstubbornthings.blogspot.comnoreply@blogger.com