Monetary Realism

Understanding The Modern Monetary System…

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Negative Interest Rates and the Business Cycle

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Negative Interest Rates and the Business Cycle The major way interest rates impact the business cycle is through stimulating or suppressing real estate. This is pretty clearly what happens if you look at the data in Ed Leamers paper Housing is the Business Cycle. Mr. Leamer says as much: “For long-run growth, residential investment is… Read More

Theory of Constraints and Economic Growth

More and more it seems to me the economy operates under a group of economic constraints, and performs to the level of the “worst” of these constraints. Credit, housing volume, business investment, commercial real estate, Collateral worthiness, consumer demand, business confidence, foreign demand, relative energy prices – the list of possible constraints on current economic… Read More

Scott Sumner has a New Job

Scott Sumner has a new job where he will be free to focus on monetary policy and NGDP futures. Good for him. NGDP isn’t a terrible way to help think about monetary policy. However, NGDP futures are a dead end. They cannot work. I feel a bit bad for the person who is funding Scott S… Read More