Item 1:
Source: Antoni.
Item 2:
Source: Antoni.
Not that the data are “wrong” (I’m not a data conspiracy theorist). Just without context, it’s pretty meaningless. Here’s what a relevant graph might show (motivated by the Quantity Theory):
Figure 1: M2 to GDP (blue, left scale), M2 to GDPNow (10/18) (blue +, left scale), PCE deflator (tan, right scale), all in logs. NBER defined peak-to-trough recession dates shaded gray. Source: Federal Reserve, BEA via FRED, Atlanta Fed, NBER, and author’s calculations.
Figure 2: M2 to GDP (blue, left scale), M2 to GDPNow (10/18) (blue +, left scale), PCE deflator (tan, right scale), all in logs, 1986Q1=0. NBER defined peak-to-trough recession dates shaded gray. Source: Federal Reserve, BEA via FRED, Atlanta Fed, NBER, and author’s calculations.
By the way, try a cointegration test on these series, for some illumination.
Antoni essentially graphed the same series in two separate tweets – well one was seasonally adjusted and the other was not. Which makes little difference. I was hoping you’d take this spin on. I also loved this comment under one of Antoni’s tweets:
M2 is exactly were it was 18 months ago!
The academic Antoni only sings one song monetary induced inflation, sorry not this time.
M2 growth is seldom the cause of inflation. From 14 to 19 it grew a Trillion a year and no inflation. Now it is flat over the last 18 months and EJ only sings M2
I was wondering if all of his readers were MAGA morons so it is good to see at least one has a functioning brain.
Antoni does seem to be a devotee of that discredited Quantity Theory of Money. Turns out Steven Koptis is also a devotee. Maybe Stevie can help Antoni write one of those Heritage pieces of “academic” work on reviving this discredited silliness. Stevie even suggested GDP/M2 may be “mean reverting”. Only problem – what’s the mean to revert to?
Monetarists used to say 1.8 but that fell apart. Stevie suggested 1.2 but that does not seem right. 1.4%? Or will any number do?
BTW – Antoni and Stevie both say we were in a recession in 2022. Stevie’s explanation seemed to be the slow growth of M2. But Antoni is saying M2 growth has been too high. I do hope these two work out this naggy issue as they write their next economic “wisdom”!
Donald Trump works for 15 minutes at a McDonalds and a day later dozens of people are falling ill to ecoli from McDonalds.
Coincidence?
Infamous conspiracist Peggy Nonan: “Is it irresponsible to speculate? It is irresponsible not to” — no matter how loony.