Why hike, Fed? Me and my pals weigh in

October 2nd, 2015 at 12:59 pm

OTE’ers will love this, I predict. Over at WaPo.

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4 comments in reply to "Why hike, Fed? Me and my pals weigh in"

  1. Amateur says:

    Good article.

  2. Tom_in_MN says:

    Interesting idea. I hope you gave them all hats for their effort.

  3. Larry Signor says:

    Powerful stuff. The point being that government spending is increasing at a paltry rate and monetary tightening will only be an added negative, perhaps moving US into austerity-hood again. A very important debate that will have long-lasting effects, one way or another. I like the gathering crescendo of sanity you point out.

  4. Sanjait says:

    Nice work.

    I especially liked Bivens’s point, that we at least have to *try* to push wage growth.

    And the premise of the question is apt. Summers made the point recently that if we weren’t at zero now, nobody would be talking about tightening. There is no fundamental case for it.

    What we should be debating, if the world made sense, is what kind of tools should be deployed for further *loosening* given the extant slack. Kocherlakota recently suggested negative interest rates on reserves. Others have long suggested tighter price growth targeting, higher price growth targeting, price level targeting, NGDPLT, etc.