What you need to think if you are calling for a NGDP target

Don’t worry. I am not going to write another post arguing that the world’s problems would all go away if its central banks adopted a NGDP level target (it has been over 10 years now, give it a rest!). There are plenty out there already: this one by Sam Dumitriu is a good place to start,Continue reading “What you need to think if you are calling for a NGDP target”

Trying to start a fight between the Bank of England and Resolution Foundation

It is excellent that the Resolution Foundation has embarked upon serious macro-economic wonkery. Their opening salvo – “Recession Ready?: Assessing the UK’s macroeconomic framework” – is as good an introduction to the state of play as you can find. They call it “the most comprehensive assessment of the UK’s macroeconomic policy framework since the financialContinue reading “Trying to start a fight between the Bank of England and Resolution Foundation”

Time for macro economics to get political once more

A former No10 colleague asked me recently: is there a definitive guide out there to how monetary and fiscal policy work together? What determines incomes?    What made his questions remarkable were both how fundamental they were, and yet how distant from the day job when we had worked together in Downing Street. Politicians doContinue reading “Time for macro economics to get political once more”

The real enemy is inaction

Tony’s somewhat grumpily-titled and long post about Market Monetarism is of course worth reading.  Even if you don’t agree with it, there are always copious educational references to file away. File this whole matter under the usual heading of “The internet gets people to argue at cross purposes”. I have a few minor observations. –Continue reading “The real enemy is inaction”

Self employment and the Bank

I think the Resolution Foundation may well be where the revolution begins.  It is now clearly asking the questions that matter about this recovery, and seems to have the resources to answer them well. Personally, I think their answers will lead to the door of the Bank of England, and what it targets – theContinue reading “Self employment and the Bank”

If macroprudential tools are like sledgehammers …

what on earth is altering the entire pathway of money spending in an economy, in order to address potential credit issues? It tells you a little about the econblogosphere I swim around that I still haven’t read a decent defence of the BIS and their “tighten early tighten often” approach to dealing with perceived creditContinue reading “If macroprudential tools are like sledgehammers …”

Market monetarism challenged

Krugman has a bit of a go at what he calls “neo monetarists”  – largely on the basis of a presumed lack of political realism.  And he may be right: within Market Monetarism, the positive vibes towards what money can do is only matched by a strong dislike for going near fiscal policy.  That playsContinue reading “Market monetarism challenged”

If we can’t even agree on what “loose money” means…

The Bank FOR*** International Settlements has been making front page FT news (£) recently with its warning that we need tighter money to guard against bubbles.  The piece kindly refers to other such warnings made in 2003.  As Ryan Avent highlights, however, they seem to have been foreseeing dozens of the next asset bubble. Cards onContinue reading “If we can’t even agree on what “loose money” means…”

Why we tell stories

Frances Coppola has written an entertaining critique of my Smaug post, which is kind of her.  We’ve tweeted a bit.  Go read her post. As is often the case when reasonable people wildly disagree, we are almost certainly addressing different propositions.  My basic point was that the MxV = PxY relation doesn’t much specify transmissionContinue reading “Why we tell stories”

Why is the deficit not improving faster?

The deficit figures today are disappointing.  There are a slew of one-offs, such as the 45p tax change a year ago (see Guardian story). I think some of the story has to be here.  A quick X-Y of the NGDP growth vs the growth in Income tax revenues of three distinct periods:   The actualContinue reading “Why is the deficit not improving faster?”