Economic benefit of asset market bubble
What the impact of asset price bubbles on US economic growth is.
Blanchard’s “Policy Model” v “Theory Model”
Back in November last year, Professor Olivier Blanchard discussed with me about his view that there should be four types of macroeconomics, and "theory models" like DSGEs is just one of them. Here is...
What is the Saturated Level of Reserves?
The Saturated Level of Reserves or efficient level of reserves, is the point which the opportunity cost for banks to hold reserves disappears, and became indifferent towards holding more reserves. The reserve demand curve beyond this point becomes close to horizontal.
Fed’s swap lines help easing Covid-era global dollar shortage
Countries with swap line arrangement with Federal Reserve, be it the standing ones or temporary, saw smaller increases in spread during the initial pandemic stress period.
Cochrane responds to Sumner’s discussion on inflation stabilization regimes
Nothing would make us more proud than seeing intelligent and informed people discuss the ideas we have put forth in the interview series. So it is our great honor to know that there is...
Early signs of inflation expectation de-anchoring back in 2021
Ricardo Reis, economics professor at the London School of Economics, explained that there were telling signs that the increase in cost of living started ealry-2021 was not a "transitory" phenomenon.
What do others think about Paul Romer’s worries… (II)
The discussion on Paul Romer's "The Trouble with Macroeconomics" continues in the blogosphere, and Simon Wren -Lewis's "Paul Romer on macroeconomics" is one of the Must-Reads.In his comments, Wren-Lewis said that Romer's view is...
A skeptical review of the QEs – why they might not be powerful as...
In their working paper "A Skeptical View of the Impact of the Fed's Balance Sheet," economists David Greenlaw, James D. Hamilton, Ethan Harris, and Kenneth D. West challenge some earlier studies that concluded QEs have a significant economic impact. Their major argument is that those research used simple event studies to quantify the impact of QE.
The problem with monetarist’s view of inflation
Long-run stability of the velocity, or the filpside of it, money demand, however, is not a empirically founded assumption.
FedSpeak Might Not Have Much Effects on Public’s Inflation Expectation
In a recent NBER working paper "Monetary Policy Communications and their Effects on Household Inflation Expectations", economists Olivier Coibion, Yuriy Gorodnichenko and Michael Weber tried to find out how the household's expectation for inflation change with regard to the information they received.
Economics
