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Dear liberal overlords

November 15th, 2009

Meta-listen to this guy:

Liberals pundits should listen to Krugman’s economic analysis of monetary policy, and ignore his pessimistic political views on its feasibility.

when you listen to that guy. And consider the fact that that guy didn’t win the Noble prize in political punditry.

Thanks.

This entry was posted on Sunday, November 15th, 2009 at 5:51 pm and is filed under money, policy.

7 Responses to “Dear liberal overlords”

  1. Gabriel Says:
    November 15th, 2009 at 8:29 pm

    Let’s not go too gaga over a particular type of monetary modeling that’s driving those claims…

  2. pushmedia1 Says:
    November 15th, 2009 at 10:01 pm

    Huh? Are you complaining about Krugman’s modelling?

  3. gabe Says:
    November 16th, 2009 at 12:03 am

    Krugman-Sumner for joint Fed Chairman in 2013! :D
    (When Bernanke’s term expires)

  4. gabe Says:
    November 16th, 2009 at 12:06 am

    What I really don’t get about Krugman is that he believes that the US is in a liquidity trap AND that the Fed can commit to higher inflation. But if there’s a liquidity trap, then how does the Fed commit to higher inflation? If the Fed’s monetary policy is currently impotent, then how can it credibly commit to affect the price level? When you’re stuck, you’re stuck. I’ve never seen him explain that.

    At least Sumner doesn’t believe in liquidity traps, so he’s internally consistent.

  5. gabe Says:
    November 16th, 2009 at 12:22 am

    Wow, just saw this:

    http://www.federalreserve.gov/RELEASES/H3/Current/default.htm

    The preliminary excess reserves numbers for the last few weeks shows excess reserves of over 1 trillion dollars! (Look at November 4p. then Excess). If that’s not a liquidity trap, it sure feels like one. (It’s at least weak monetary policy)

  6. Gabriel Says:
    November 16th, 2009 at 5:38 am

    (1) Are they still paying interest on reserves?

    (2) The zero bound is a problem for a particular instrument, so, yeah, do the obvious and use other instruments.

    (3) Hello, Mr. Treasury, here’s a blank check, go crazy.

    (4) For economists, making inflation is either (i) far too easy, or (ii) impossible, depending on the state of the world, this holds for the same economist.

    (5) Monetary is probably one of the weakest of the fields mostly because it’s, by far, one of the most “reduced form” fields. For example, Calvo + Taylor rule captures a whole bunch of 0% of recent events.

  7. Gabriel Says:
    November 16th, 2009 at 4:55 pm

    Oh, yeah, and that guy didn’t win the Noble prize in monetary macroeconomics either.