Finance Basic To Advance Level Knowledge

Some Assorted Musings: 1.  I have a new policy brief at the Mercatus Center that makes the case for a Nominal GDP level target from the knowledge problem perspective. It is a non-technical paper meant to be accessible by policy makers and lay people. It echoes some of the  more technical arguments made in this paper by Josh Hendrickson and myself.   2. George Selgin testified this week before the House Financial Services Committee as part of the hearing Monetary Policy v. Fiscal Policy: Risks to Price Stability and the Economy . His testimony is a tour de force through the issue of interest on excess reserves .  3.  Scott Sumner pushes back against all the macro moralists waving their finger at Germany for running current account surpluses. He argues it is mistaken to blame Germany's current account surplus for dragging down global demand growth.  4. Is any part of potential GDP endogenous to the level of aggregate nominal demand? This...

Ramesh Ponnuru and I have a new article in the National Review where we make the case that a better alternative to a higher inflation target is a NGDP level target: Does the U.S. economy need more inflation? A group of 22 progressive economists has written a letter to the Federal Reserve urging it to appoint a blue-ribbon commission to study whether the central bank should raise its target for inflation above its current 2 percent. Fed chairman Janet Yellen, in her press conference following the latest interest-rate increase, called it “one of the most important questions” facing the organization. The economists’ advice shouldn’t be rejected out of hand, but it should be rejected. They make some valid points in their diagnosis of the ills of the current monetary regime. But the Fed can and should address these problems without raising inflation...   These arguments for a higher inflation target are reasonably strong if you accept the premise that keeping inflation stable sh...