Department of “Huh?!”: What Does Money Velocity Tell Us about Low Inflation in the U.S.

Yi Wen and Maria Arias appear to say that the Federal Reserve has done two independent things since 2008: Increased the stock of money at 33%/year. Pursued an unconventional exceptionally-low interest-rate policy that has reinforced the recession. The extremely strong implication of their piece is that the Federal Reserve could have (a) kept money growth strong and produced a high money stock while (b) keeping interest rates from falling to the zero lower bound, or, alternatively (a) kept the money growth rate low and produced... More >

Things to Read on the Evening of September 1, 2014

Must- and Shall-Reads: Jonathan Chait: Feast of the Wingnuts Steven Greenhouse: More Workers Are Claiming ‘Wage Theft’ Peter Watts: Are We There Yet? En Route to Dystopia with the Angry Optimist   Paul Krugman: Inflation, Septaphobia, and the Shock Doctrine: "The bad news from Europe is a reminder that the basic insight some of us have been trying to convey, mostly in vain, ever since 2008 remains valid: the great danger facing advanced economies is that governments and central banks will do too little, not... More >

Evening Must-Read: Bloomberg View: Stopping Europe’s Descent Into Deflation

Bloomberg View: Stopping Europe's Descent Into Deflation: "Until recently it was debatable... ...whether Europe's economy was recovering. No longer. Its recovery has stopped. The question now is whether the stagnation will tip over into something worse.... The preliminary estimate of euro-area inflation in August from a year earlier is 0.3 percent.... There's no growth in the euro area.... What can the ECB do? Draghi says the bank has already acted.... Yet the package of measures the ECB unveiled in June didn't amount to much.... It's... More >

Evening Must-Read: Paul Krugman: Inflation, Septaphobia, and the Shock Doctrine

Paul Krugman: Inflation, Septaphobia, and the Shock Doctrine: "The bad news from Europe is a reminder that the basic insight... ...some of us have been trying to convey, mostly in vain, ever since 2008 remains valid: the great danger facing advanced economies is that governments and central banks will do too little, not too much.... Yet the power of the hard money/fiscal austerity orthodoxy (yes, market monetarists want one without the other, but they have no constituency) remains immense. Why?... The one percent (or actually... More >

#FF America’s Best, Most Substantive, and Most Accurate Center-Left Polemicist Is… Jonathan Chait: Monday Focus for September 1, 2014

A Baker's Dozen of recent keepers: Keystone Fight a Huge Environmentalist Mistake Why I’m So Mean Wasting Away in Hooverville Greg Mankiw Loves One Percent, Doesn’t Know Why Fear of a Female Fed Chief Why Is Obama Caving on Taxes? The Lonely Death of the Republican Health Plan What Caused The Deficit? The Morality Of Political Hostage-Taking Paul Ryan Is Making Things Up Again And three that require excerpting: (11) Jonathan Chait: Why Washington Accepts Mass Unemployment: "The recovery looks safe for those of us...... More >

Morning Must-Read: Free Exchange: Germany’s Hyperinflation-Phobia

Free Exchange: Germany's Hyperinflation-Phobia: "John Maynard Keynes, as early as 1919... ...recognised the threat inflation posed to modern capitalist societies: Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency… [he] was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which... More >

Things to Read on the Afternoon of August 29, 2014

Must- and Shall-Reads: **David H. Autor Structural Demand Shifts and Potential Labor Supply Responses in the New Century | Polanyi’s Paradox and the Shape of Employment Growth Greg Sargent: Scott Brown calls for replacing Obamacare with Romneycare Rakesh Vohra: Rethinking Intermediate (day 1) Matt O'Brien: Why are Venezuela’s supermarkets so empty?   Lawrence Mishel: Broadening Agreement That Job Polarization Wasn’t Present in the United States In 2000s: "The 'job polarization hypotheses'... claim[s] that computerization leads to the 'simultaneous growth of high-education, high-wage and low-education, low-wages... More >

Afternoon Must-Read: Menzie Chinn: Wisconsin Forecasted to Lag Further Behind Minnesota

Menzie Chinn: Wisconsin Forecasted to Lag Further Behind Minnesota, and Kansas travels its own path... ...Bruce Bartlett brings my attention to this article noting Minnesota’s economic performance. This reminded me to check on the Philadelphia Fed’s forecast.... The cumulative growth gap between Minnesota and Wisconsin (relative to 2011M01) is forecasted to grow--rather than shrink--over the past six months.... The cumulative growth gap between Kansas and the Nation is also forecasted to rise, from the current gap of 2.7%, to 3.2%, in just the next six... More >

Afternoon Must-Read: Alicia Munnell: Dueling Data Muddies Social Security Debate

Alicia Munnell: Dueling Data Muddies Social Security Debate: "The most recent missile is Andrew Biggs’ Wall Street Journal op-ed... ...'Liberals for Social Security Insolvency'. Biggs notes that 75-year Social Security deficit projections by the Congressional Budget Office (CBO) have nearly quadrupled between 2008 and 2014... to argue that it is foolish to put forth proposals to expand the program. The angle that I find the most disturbing is the suggestion that Social Security costs bounce around, that we don’t really know what’s going on, and... More >

Afternoon Must-Read: Rob Weiner: Overruled: A (Third) Response To Professor Adler on Halbig

Rob Weiner: Overruled: A (Third) Response To Professor Adler: "In the hopes of capping the increasingly tedious (not to mention snarky) contretemps with Professor Jonathan Adler... ...I think it worth reviewing a few of the instances where his responses to my blog posts on Halbig have ignored, elided, or misconstrued my points.... I observed that a threat... must be communicated and understood.... Among the evidence I cited that Section 36B was not perceived as a threat were the initial characterizations of the disputed language by... More >