2013

I've suggested previously that QE could actually be deflationary. I looked at it from several perspectives - collateral effects, the monetary transmission mechanism, distributive effects, even Peter Stella's "deadwood" inhibiting bank…

Over the past couple of years it has gradually become the consensus view that QE has failed because it hasn’t created the economic growth that everyone was hoping for. I find that view overly simplistic and naïve in equal measures. QE - or…

The release of the first estimate of Q3 GDP was initially met with excitement as the headline print of 2.82% growth was far in excess of consensus estimates of 2.0%. Unfortunately, the euphoria quickly faded as the details painted a much…

Yesterday the European Central Bank cut the interest rate on its main refinancing operations by 25 basis points to a record low 0.25%. It also cut the rate on the marginal lending facility by 25 basis points to 0.75%. The news was…

News links for 7 Nov 2013

Current-account deficits have caused problems in several Eurozone countries, but surpluses are also an issue. This column argues that surpluses are detrimental to the welfare of the population to the extent they are driven by structural…

Recently, I wrote a series of posts predicting that the Fed would give up on QE and move toward forward guidance in order to be able to normalize policy. Nevertheless, I have also been saying for quite some time I believe the US zero rate…

News links for 6 Nov 2013

While the US housing market remains relatively robust, it is likely to face a couple of headwinds going forward. One is the lower affordability index. The other is the recent slowdown in net household formation.

Paul Krugman's use of the unex­pected phrase 'endogenous money' has moti­vated me to pub­lish, ahead of sched­ule, a model com­par­ing Loan­able Funds to Endoge­nous Money that I promised to pro­vide in the dis­cus­sion on Nick Rowe's blog.