As the Fed sets in place the road map to withdrawing monetary stimulus, I wonder how it is that so many believed the Fed’s implementation of unconventional monetary policy would lead to surging high inflation. Examples include House Budget Committee Chair Paul Ryan, who stated in November 2008 2010:
Category Archives: inflation
Inflation and Debt
From Debt and Incomplete Financial Markets: A Case for Nominal GDP Targeting, by Kevin Sheedy (LSE), presented at the NBER Summer Institute:
This paper has shown how a monetary policy of nominal GDP targeting facilitates efficient risk
sharing in incomplete financial markets where contracts are denominated in terms of money….
Just how helpful is inflation?
According to one widely adopted class of economic models, raising the inflation rate would be one of the most helpful things that could happen to economies in the situation currently faced by Japan and the U.S. Here I describe some new research relevant for testing that theory.
Who is holding all those U.S. dollars?
If recent trends continue, in a few months there will be $1.2 trillion in Federal Reserve notes (otherwise known as dollar bills) in circulation. Who is holding all these?
Guest Contribution: “Should We Care about Sticky Prices?”
Today we are fortunate to have a guest contribution written by Yuriy Gorodnichenko (UC Berkeley) and Michael Weber (UC Berkeley). It is based upon their paper entitled “Are Sticky Prices Costly? Evidence From The Stock Market”.
Stevenson and Wolfers: “Is Paul Ryan an Inflation Nutter?”
Additional evidence addressing the question asked by Betsey Stevenson and Justin Wolfers.
QE3 and beyond
Now that we’ve closed the books on 2012, I thought it might be useful to take a look at where monetary policy has led us over the last four years.
“Lost Decades”: Reality versus the Fantasy of Easy Fixes
The paperback edition of Lost Decades is officially released as of today.
Fat fingers and the price of oil
Can the wild swings in the price of oil over the last few weeks have anything to do with supply and demand?
Effects of QE3
On Thursday the Federal Reserve announced a series of measures that will come to be referred to as a third round of “quantitative easing,” or QE3. Here I review what effects this is intended to have and some of the developments so far.