Market Monetarism

Archive for Market Monetarism

Did Hayek Favor Targeting NGDP?

I think I may have blogged about this before, but hey, if I can’t quite remember, maybe you guys can’t either. (Plus, there could be new readers.) Sometimes I see people claiming that Hayek supported NGDP targeting, or perhaps that Hayek’s preferred monetary regime would mimic NGDP targeting. I am by no means a Hayek […]

Questions for Keynesians and Market Monetarists

In my never-ending quest to achieve total magnanimity, I gently ask the following questions to make sure I understand how rival camps view the world. (1) To the Keynesians: I understand the point that “Ricardian Equivalence,” even if true, would not undermine the boost to current Aggregate Demand from a large government budget deficit. For […]

Tyler Cowen Joins Murphy in Sumner Bashing

[UPDATE at the end.] I really liked this recent post from Tyler, where he writes (all formatting in original): [Tyler Cowen quotation:] To get more specific yet, I am very much a fan of the ngdp rule approach to monetary policy, but I am uncomfortable with one strand in market monetarist thought. I worry when […]

David Beckworth Adopts Scott Sumner Criterion for “Market Expectations”

In this post, David Beckworth uses federal funds futures contracts to glean information about “the market”‘s expectations of future monetary policy shifts. Obviously there are caveats about reasoning from an expected price change, but I think this is a good avenue for the Market Monetarists to win skeptics over. In particular, if people in (say) […]

Step #3 In My Dispute With Beckworth: Moving From Davie on Interest Rates to David on Interest Rates

First, a recap: ==> In Step #1 I made the obvious point that if an employer in late October says that the paycheck will be $1000 higher in November than previously expected, and the paycheck in December will be $700 higher than previously expected, that clearly this is a more generous policy, relative to the […]

Step #2 in My Dispute With Beckworth: Moving From Wages to Interest Rates

In Step #1 we established that the “tightness” or “looseness” of an employer’s wage policy involved the absolute level of wages, relative to what was previously expected. Changes in the expected future movement of wages was incidental, and indeed could give you the wrong answer, in cases where it went the opposite way from movements […]

Step #1 in My Dispute With Beckworth: Defining the Stance of Future Policy

I realize that when I’m being too cutesy, it’s not clear what my overall purpose is. So let me first state the overall situation, and then proceed to the (narrow) point of this particular post. Overall: Recently, David Beckworth wrote a post defending Ted Cruz’s remarks about the Fed in 2008. David had two main […]

A Hypothetical Discussion About Employer Wage Policy

It is late October. The boss of a group of office workers makes an announcement regarding their paychecks for the rest of the year. Specifically, he announces that in addition to their base pay, all employees will receive a bonus of $1,000 added to the November paycheck and $700 added to the December paycheck. The […]