Assorted Macro Musings
Some assorted macro musings: New NGDP Paper My colleague Scott Sumner and Ethan Roberts have a new primer on NGDPLT . It is a very accessible introduction to the topic, but one that also gets into NGDPLT futures targeting. Check it out. JEC Report on the Slow Recovery The Joint Economic Committee of Congress has a new report where, among other things, it lays out a monetary explanation for the slow recovery. A key excerpt on why QE did not create a robust recovery (page 61): The Fed was clear from the outset that it would undo its LSAPs eventually (i.e., remove from circulation the money it created in the future). The temporary nature of the policy discouraged banks from issuing more long-term loans. Alternatively, as economist Tim Duy pointed out during the inception of the Fed’s first LSAP program: " Pay close attention to Bernanke’s insistence that the Fed’s liquidity programs are intended to be unwound. If policymakers truly i...