Lunchtime Must-Read: Cardiff Garcia: Affordable Housing and the Legit Big-City Whinge

Cardiff Garcia: Affordable Housing and the Legit Big-City Whinge: "When city-dwellers moan about their high cost of living... ...they often elicit the unsympathetic retort that they should shut up and praise the ghost of Jane Jacobs for the cultural vibrancy of their neighborhoods, the lucrative jobs, and the artisanal pizza: 'Living in a great city is a consumption good, you whinging ninnies — you SHOULD have to pay for it! Why do you think you’re entitled to live wherever you want?' Hey, fair enough. But... More >

Lunchtime Must-Read: Simon Wren-Lewis: In Praise of Macroeconomists (or at Least One of Them)

Simon Wren-Lewis: In Praise of Macroeconomists (or at Least One of Them)): "One of the architects of that macroeconomic mainstream is Lars Svensson... ...key papers... maths and rational expectations... member of Sweden’s equivalent of the Monetary Policy Committee from 2007 to 2013.... Svensson... argued that there was still plenty of slack in the economy, and raising rates would be deflationary, so that inflation would fall well below the central bank’s target of 2%. By the end of 2012 inflation had indeed fallen to zero, and... More >

The Federal Reserve Retires to Its Tent…: Morning Note on Tim Duy

A very interesting piece by Tim Duy on the recently-concluded Federal Reserve FOMC meeting. The precis: the Federal Reserve does not view itself as moving to tighten policy, but rather as moving to a policy that is still extraordinarily stimulative--especially considering the level of the unemployment rate. If the unemployment rate were the only piece of information we had available, I would understand the FOMC's position. But I see 2%/year wage growth. I see a prime-age employment-to-population ratio that is still extremely low, I see... More >

Robert Waldmann: Extra Thursday DeLong QE/Risk Smackdown: Morning Comment

Robert Waldmann: Extra Thursday DeLong Smackdown: "The fact that the economy seems desperately in need of looser monetary policy... ...after massive QE tends to suggest that QE just doesn't work. In 2010 it was possible to argue that massive purchases of long term treasuries would have an effect similar to reductions in the Federal Funds rate. Now not so much. I do object to your identifying the risk born by the Fed with 'duration risk'. That is true only of the pointless QE based on... More >

Morning Must-Read: Matt O’Brien: Why the Fed Is Giving Up too Soon on the Economy

As I see it, Federal Reserve policy right now is reasonable only if the unemployment rate is taken as a sufficient statistic for the state of the labor market. And it seems to me the odds are 4-1 against that being true... Matt O'Brien: Why the Fed is giving up too soon on the economy: "Two years and $1.7 trillion later... ...the Fed's latest round of bond-buying, or QE3, is officially over. What did it get us?... The best answer is what it didn't get... More >

Suppose–Counterfactual World–That the U.S. Had Avoided Large-Scale QE since the Start of 2010…

...and that the employment, inflation, and futuer breakeven outcomes realized in that counterfactual world had been those seen in our world: Is there any question that in that counterfactual world the FOMC would right now be actively and aggressively on the point of a massive QE program--that the only questions would be "how much" and "how quickly"? Today, with the ending of QE, we live in that counterfactual world--with three differences: Since the start of 2010 the FOMC has already done $2.2 trillion of QE--and... More >

Lunchtime Must Read: Jonathan Chait: Yellen Mentions Inequality; Right Scandalized

Jonathan Chait: Yellen Mentions Inequality; Right Scandalized: "Even the American Enterprise Institute’s Michael Strain... ...a moderate, wrote that Yellen is now ‘in danger of becoming a partisan hack.’... The parties don’t merely disagree about the merits of inequality, they disagree about the merits of even acknowledging it.... Remember Mitt Romney conceding that inequality should only be discussed in ‘quiet rooms’?... Merely by stating facts about inequality in public, even without taking a stand on it, Yellen has placed herself on one side of a partisan... More >