tag:blogger.com,1999:blog-2546602206734889307.post3168154606670744186..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: The advantage of a central bank not being ‘ahead of the curve’ Mainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2546602206734889307.post-66196871450517160522017-12-16T17:27:35.849+00:002017-12-16T17:27:35.849+00:00Thanks. I will look for it. Thanks. I will look for it. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-115448317328155582017-12-16T17:27:02.637+00:002017-12-16T17:27:02.637+00:00That will not happen unless fiscal policy is used ...That will not happen unless fiscal policy is used as a countercyclical tool at all times. That is not current policy. Mainly Macrohttps://www.blogger.com/profile/09984575852247982901noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-84230383812665687632017-12-16T16:22:57.650+00:002017-12-16T16:22:57.650+00:00if the economy were truly "above potential&qu...if the economy were truly "above potential" or "over heated" then one would certainly expect inflation <br /><br />perhaps workers are not experiencing much increased bargaining power<br /><br />or there is less monopoly power in their economy that one might expect<br /><br />those are the two main elements causing excess inflation<br /><br />it is possible we just have "sticky inflation" and the onset of excess inflation is brewing and just around the corner<br /><br />but perhaps they are not really overheated at all<br /><br />at any rate, what is your explanation for this "sticky inflation" if that is truly what we have going on hereAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-5958201225279550632017-12-16T01:43:09.221+00:002017-12-16T01:43:09.221+00:00I am not sure about your argument.
If you have th...I am not sure about your argument.<br /><br />If you have the output gap is positive and the inflation is close to 2%, then you should have positive policy interest rate no less than 4%, assuming that real short rate being around 2%. <br /><br />European economies like Japan's economy may be in a aggregation trap, in which a central bank can not raise its policy rate in fear of appreciation of the currency.<br /><br />I suspect a small open economy uner floating exchange rate system could easily face asset bubbles and bursts if you continue to keep such an ultra easy monetary policy.<br /><br />Question remains when the realty comes true as we saw in the so-called Leman shock a decade ago. <br /><br />Tomo Nakamaru Korekiyo Lettershttps://www.blogger.com/profile/14968444065533026624noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-5971472291471765682017-12-15T20:24:40.997+00:002017-12-15T20:24:40.997+00:00I wonder if an element of hysteresis could be at w...I wonder if an element of hysteresis could be at work. By overshooting inflation with a high-pressure labor market, the nairu may get pulled down a bit, reducing the pressure on inflation.tom mhttps://www.blogger.com/profile/06218456457883749242noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79204806907823162692017-12-15T14:23:28.805+00:002017-12-15T14:23:28.805+00:00With the exception of some details of the historic...With the exception of some details of the historical description the conclusions in this post are very much in line with those in a speech held last week by the Riksbank Deputy Governor Per Jansson. Did you happen to read it? If not, it is available on the Riksbank’s web site. [Realised that it probably wasn’t a good idea to include a link in the comment.]Mikael Apelnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-74325799654244152852017-12-15T13:18:11.975+00:002017-12-15T13:18:11.975+00:00With the exception of some details of the historic...With the exception of some details of the historical description the conclusions in this post are very much in line with those in a speech held last week by the Riksbank Deputy Governor Per Jansson. Did you happen to read it? If not, it can be found here: http://www.riksbank.se/Documents/Tal/Jansson/2017/tal_jansson_171206_eng.pdfMikael Apelnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-36990738011808867022017-12-14T18:32:24.586+00:002017-12-14T18:32:24.586+00:00It will be interesting to see whether interest rat...It will be interesting to see whether interest rates can be kept at zero (or perhaps even -0.5%) for ever as MMT people advocate. If that turns out to be the case, then perhaps the central bank doesn't have much to do, there simply needs to be an ample excess of reserves and that's the job done?stonehttps://www.blogger.com/profile/16420341212847543229noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-46051596210642011552017-12-14T14:56:46.454+00:002017-12-14T14:56:46.454+00:00You seem to have ignored the influence that 7% une...You seem to have ignored the influence that 7% unemployment (17% unemployment for adults < 25 yrs) may have had in Sweden.<br />They will get inflation (imported from China) in 2018, what then?StuartPhttps://www.blogger.com/profile/13748038209546648459noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-90643612398556092882017-12-14T10:35:47.521+00:002017-12-14T10:35:47.521+00:00The idea that interest rates should return to “nor...The idea that interest rates should return to “normal” is one of the most fatuous ideas of all time. In Galileo’s day it was “normal” to claim the Sun revolved around the Earth, which of course proves the Sun really does revolve around the Earth. And in ancient Rome is was “normal” to have lions eat Christians, which proves it’s a jolly good idea to have lions eat Christians.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.com