tag:blogger.com,1999:blog-1740670447258719504.post3862332358058257851..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: On inflation, nominal expenditures, investment and QE2Evanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-1740670447258719504.post-76766947637414733412010-11-18T17:12:52.687-05:002010-11-18T17:12:52.687-05:00hey - some macro is worth unlearning :)hey - some macro is worth unlearning :)Danielhttps://www.blogger.com/profile/17192667997950934790noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-78736885931522107832010-11-18T09:29:45.556-05:002010-11-18T09:29:45.556-05:00I think I actually unlearned macro in that class. ...I think I actually unlearned macro in that class. :)waterzooinoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-78653557320176483072010-11-17T17:42:28.030-05:002010-11-17T17:42:28.030-05:00Check out Bill Woolsey's latest:
http://monet...Check out Bill Woolsey's latest:<br /><br />http://monetaryfreedom-billwoolsey.blogspot.com/2010/11/monetarists-quasi-vs-old.html#linksLee Kellynoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-1756698003057626262010-11-17T17:25:31.149-05:002010-11-17T17:25:31.149-05:00I don't know... it might have something to do ...I don't know... it might have something to do with the fact that that's your user name. I used to refer to Jon and Mattheus as Catalan and von Guttenberg but that sounded weirdly formal... that, to a certain extent, explains why I dispense with "Kelly" but it doesn't explain why I don't say "Lee".<br /><br />Very odd... I never even noticed. I think only knowing you virtually probably makes it sound less weird to my ears than yours - it's just a handle, you know?<br /><br />Alright - Lee it is. That is weird and now you've brought it to my attention and it sounds weird to me.Danielhttps://www.blogger.com/profile/17192667997950934790noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-14124908825415757232010-11-17T17:21:19.075-05:002010-11-17T17:21:19.075-05:00I should emphasise that, like Daniel, I am self-ta...I should emphasise that, like Daniel, I am self-taught. I just comment on internet blogs. I don't teach or publish.<br /><br />By the way, why do you <i>always</i> write my forename? You established "Lee Kelly" right at the beginning, so why not just write "Kelly" thereafter? I am not complaining ... just curious.Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-15723351641309057622010-11-17T17:16:21.953-05:002010-11-17T17:16:21.953-05:00I think that's very well stated. I suppose my...I think that's very well stated. I suppose my repeated point is simply that fiscal policy takes a lot of the uncertainty out of your "how it all shakes itself out" point. My major concern with guys like Scott Sumner (and your analysis here) is that there's a gap between nominal expenditures and actual output and employment growth. I can see the logic of why it could work without a problem, but there seems to be a lot of "let it all shake out" finger crossing.<br /><br /><i>It's interesting how the blogosphere debate has been crystalising recently. Participants are discovering more common ground, or at least mutual understanding -- it's getting more difficult to brand opponents as stupid and/or evil</i><br /><br />I think so. But I don't think it's just the discovery of common ground - it's also the creation of common ground. People are learning, and that is excellent.Danielhttps://www.blogger.com/profile/17192667997950934790noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-71530090478596604312010-11-17T17:12:28.395-05:002010-11-17T17:12:28.395-05:00It's interesting how the blogosphere debate ha...It's interesting how the blogosphere debate has been crystalising recently. Participants are discovering more common ground, or at least mutual understanding -- it's getting more difficult to brand opponents as stupid and/or evil. Intellectual divisions that once appeared substantial now seem more like semantic quibbles, and the terms and emphases of different sides appears to be converging.<br /><br />The so-called quasi-monetarists like Sumner, Beckworth, and Woolsey have been good in this regard, because they borrow from multiple traditions. In one place they seem Austrian, another monetarist, and then Keynesian. Of course, I don't know what influence all this has had on the larger public debate ... though NGDP targeting was mentioned at a Fed meeting!Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-3581198999978596822010-11-17T16:53:42.883-05:002010-11-17T16:53:42.883-05:00There is an excess demand for money; one consequen...There is an excess demand for money; <i>one consequence</i> of resolving that excess demand will be higher measures of nominal income (like FINSAL or NGDP). If the Fed's notes were redeemable in gold, then another consequence would be more redemptions at the Fed's gold window. Monitoring these type of consequences can help the Fed gauge when the excess money demand has been satisfied.<br /><br />The Fed increases the supply of base money by purchasing assets -- primarily government bonds. This increases the quantity of bank reserves and, when the seller is not a bank itself, increases aggregate cash balances. How this all shakes itself out in terms of inflation, interest rates, investment demand, etc. all depends on how the recipients spend the money, to what degree there is idle capacity in the economy, if there have been any shifts in the economies' time preference, etc. So long as nominal income hits the Fed's target (a 2-3% level target would be good, in my opinion), nothing else really matter.<br /><br />I might predict that real interest rates will fall, investment demand will pick up, etc., but if I am wrong and nominal income hits its target anyway, then was the policy a failure? No, because the particular predictions are not really important. Does that make sense? I have no idea if Beckworth agrees with me or not.Lee Kellynoreply@blogger.com