[credit provider=”World Economic Forum” url=”http://www.flickr.com/photos/worldeconomicforum/5393267553/”] The big news in central banking this week came from the Fed, which announced the adoption of an “Evans Rule,” a concept named after Chicago Fed President Charlie Evans, who proposed back in 2011 that the Fed link easy money with explicit economic targets.In other […]
[credit provider=”YouTube” url=”http://www.youtube.com/watch?v=VP4IiKxNj8I”] The Fed’s announcement of QE Unlimited was a clear departure from past strategy: Rather than seeing asset purchases as an amount of money injected into the financial system, the Fed is now aggressively using the power of future guidance.It’s a step in the direction of Nominal GDP […]
[credit provider=”AP Images”] The Fed is set to meet next week, and thanks to Friday’s disappointing jobs report, economists have raised their odds of seeing QEIII adopted.That would mean that in an effort to boost the economy, the Fed would buy more purchases… perhaps Mortgage Backed Securities with the purpose […]
[credit provider=”Michael Woodford, Columbia” url=”http://econ.columbia.edu/michael-woodford-institute-new-economic-thinking”] Last week at Jackson Hole, economist Michael Woodford (the world’s foremost expert on monetary policy), presented a groundbreaking paper on what the Fed could do to stimulate the economy with interest rates at 0%. Rather than asset purchases (as Bernanke has favoured), Woodford suggested that […]
[credit provider=”Natursports/Shutterstock and Alex Wong/Getty Images”] The hot talk in monetary policy these days regards Nominal GDP targeting.
If you just knew two things about the current state of the US economy — that unemployment was unacceptably high and that inflation was subdued — you’d suggest that the proper course for the Federal Reserve would be to lower interest rates, and make money cheaper.
[credit provider=”Dgrilla” url=”http://www.shutterstock.com/cat.mhtml?lang=en&search_source=search_form&version=llv1&anyorall=all&safesearch=1&searchterm=federal+reserve&search_group=&orient=&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&commercial_ok=&colour=&show_color_wheel=1#id=41104303&src=fc42b82f01b4ad94514edf774632a433-1-5″] Minutes from the November meeting of the Federal Open Market Committee will be published today, and investors will be scouring them for hints at drastic measures ahead from the Federal Reserve.The committee held the federal funds rate target stable at 0.25% and did not announce significant new […]
[credit provider=”i am the sam via Flickr” url=”http://www.flickr.com/photos/newspress/5040167201/”] You know that Goldman Sachs is a leading proponent of NGDP targeting by the Fed, and in fact it was Goldman’s call for NGDP targeting that explains why this idea has moved from academic fringes (and blogs) to something that’s been getting […]
Federal Reserve Chairman Ben Bernanke gave a speech to soldiers and their families at Fort Bliss, TX, today explaining the Fed’s role and what it’s doing to stimulate the economy.
The debate over NGDP targeting is getting even hotter, and it looks as though the its advocates are getting even more strident in their belief that all the Fed needs to do is announce a specific goal for NGDP, and the economy would heal, thanks to an increase in inflation […]
He just got asked it:
[credit provider=”commons.wikimedia.org” url=”http://commons.wikimedia.org/wiki/File:Olympic_Development_(Mens)_100m_Dash.jpg”] For the past couple of weeks, Goldman’s economics analysts have lead to a big popularization in the idea that the Fed ought to target a specific Nominal GDP and make sure it happens.NGDP targeting is an idea that’s been kicking around economic circles for a while, but […]
A major breakthrough in popular economic thinking happened last weekend.
This past weekend, Goldman said that the Fed should tilt its mandate way more towards creating jobs, and be willing to target a specific level of Nominal GDP.