I was thinking about how a completely subservient central bank can destroy price stability, referring to examples from history. From Phillip Cagan’s U.Chicago dissertation:
It Can’t Happen Here: Inflation Edition
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All Instantaneous Core Inflation Measures Rose in July
And CPI nowcasted to rise in August, too:
Guest Contribution: “Turning Medical Science Back to 1900”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version was published by Project Syndicate.
Still on the Trade Policy Uncertainty Roller Coaster
The appeals court decision is a win, but we’re still a far way from resolving policy uncertainty:
Business Cycle Indicators as of End-of-August
Real personal income ex-transfers, manufacturing and trade industry sales, civilian employment, civilian employment adjusted to NFP concept, industrial and manufacturing production, real retail sales, vehicle miles traveled, and freight transportation services are all below recent peaks. Other than that, the economy is growing.
Deceleration Confirmed
Despite the upward revision to Q2 GDP, and accelerated nowcast growth in 3rd quarter GDP, aggregate demand is decelerating.
Term Premium and Trsy-TIPS Breakeven
The 10yr term premium has risen, as has the 5yr TIPS-Trsy breakeven, in the wake of Mr. Trump’s campaign to subjugate the Fed.
G. Dirk Mateer Asks: “Do We Still Really Need the Bureau of Labor Statistics?”
I’d say “yes”. From RealClearPolitics:
Re-Arranging the Syllabus (Again): Barro-Gordon Moved Up
For the first time in four years, I get to teach a course on the Financial System, which is like a financially focused macro course. But lo and behold, Trump’s actions make me re-focus the course…
Economic Policy Uncertainty Spikes
In the wake of Trump’s letter re: Lisa Cook: