SAO PAULO | By Marcus Nunes | That’s plainly absurd. But maybe it’s what you should expect if the Fed narrows down its focus of analysis to a “corner of the room (inflation) which has already been ‘cleaned-out’”.
WASHINGTON | By Pablo Pardo | Federal Reserve’s Beige Book is like a breeze of fresh air for those who think that economic analysis relies too much on data and math. The famous Book is made just by using non-systematic, non-quantitative inputs. Maybe that is not too effective to estimate until the last decimal the future evolution of the GDP deflator, but it is extremely precise to determine the current state of affairs of the economy.
SAO PAULO | Guest post by Benjamin Cole at Historinhas | No serious democrat contends that obscurantism, opacity and secrecy are handmaidens of good government. Indeed, closed doors are properly and universally regarded as cardinal sins, while transparency and accountability as gateways to working democracies. Yet the public is barred from meetings of the most powerful economic policymaking body in the United States—the Federal Open Market Committee, the decision-making body of the Federal Reserve Board, wherein monetary policy is decided.
SAO PAOLO | By Marcus Nunes | Let´s see. For his memoirs as Fed Chairman Greenspan pocketed 8 million from Penguin. Given PCE inflation Bernanke should get at least 9 million from the same editor. But Bernanke´s book is worth more. Greenspan presided over the Great Moderation. Great Moderations don´t give rise to dramas as does a Great Recession (Lesser Depression).
SAO PAOLO | By Marcus Nunes | In his recent post at Econlog Scott Sumner writes “Questions that have no answers”: There are some questions that have no answers. One example is the question: “Was monetary policy too expansionary during the housing boom?” The only sensible answer is “it depends.” It’s not clear what the Fed was trying to do during this period.
SAO PAULO | By Marcus Nunes via Historinhas | Recently I showed this chart [see above] to press the point against the conventional wisdom that the purpose of the sequence of QEs was to lower long term rates.
SAO PAULO | By Marcus Nunes via Historinhas | Even if all economic indicators suggest that the ECB should cut interest rates at today’s meeting, it seems unlikely to do so, and follow Germany -its main shareholder- instead. I tried to imagine what would be of the US if North Dakota yielded the same power over the Fed as Germany does over the ECB.
NEW YORK | By Benjamin Cole Fisher via Marcus Nunes’ Historinhas |Dallas Fed president wants the institution to stomp on the brakes and quit Quantitative Easing (QE) now, and preferably yesterday. Indeed, Fisher proudly told his audience he would have been a bulwark against QE, if he could have been.
NEW YORK | By Mike Konczal via Next New Deal | One way of judging how the economy evolved in 2013 is to compare it to the Federal Reserve’s projections of it. As some market monetarists believe, these projections aren’t neutral projections of inflation and growth but also a communication of what the Fed thinks about what it can accomplish. So, how did the Fed’s projections for 2013 turn out? Did the economy end up how the Fed said it would when it announced expanded monetary policy?
LONDON | By Joseph Abate at Barclays | For a global 21st century economy, there is a surprising amount of US paper currency circulating. Total US currency outstanding is approximately $1.2trn, which on a per capita basis works out to $3,800.