1. I’m starting the feel sorry for Harvard. Once again Bentley’s Fed Challenge team advanced to the National competition, where they will face fearsome competition like Princeton (featuring Evan Soltas.) The Boston regionals are always tough. Harvard finished second, and the competition included other top schools like Dartmouth and Boston College. Congratulations to the team members:
Kathryn Mastromarino ’16
Alice Lin ’17
Michael Liotti ’16
Sal Visali ’16
Dan Reeves ’15
Matt Zeglen ’17
Amanda Pine ’16
Aizhan Uzakova ’15
Michael Acampora ’17
Brian Levine ’16
And congratulations also to the coaches Aaron Jackson and David Gulley, who do an outstanding job every year. The team has advanced to the finals in 4 of the past 6 years, winning it all in 2012.
2. In other news, here’s Caroline Baum:
One group of economists, known as market monetarists, has advocated implementing a nominal GDP target, which comports with the Fed’s dual mandate of full employment and stable prices. An NGDP target “” real GDP plus inflation “” incorporates both mandates, with employment serving as a proxy for real GDP.
At times, the balance between growth and inflation would be less than ideal, but advocates believe over time an NGDP target would produce smoother results than the current operating procedure, whatever that is.
Central bankers are always in search of the holy grail: something that would enable them to keep the economy on a glide path. They had high hopes for inflation targeting, which was widely viewed as both an end in itself (stable prices) and a means to an end (full employment), as former Fed Chairman Ben Bernanke liked to say.
Yet inflation targeting has its shortfalls. For example, technological innovation tends to raise real GDP and lower inflation. Under an inflation-targeting regime, the central bank would lower interest rates, which is exactly the wrong prescription. With an NGDP target, policy makers would avoid that mistake.
3. The wrong kind of Austrian economics:
An Austrian 85-year-old cut up into tiny pieces almost a million euros ($1.1 million) in an apparent attempt to spite her heirs, authorities said Thursday.
Like the US, Europe has some truly bizarre public policies. For instance, a European billionaire is not allowed to give away his fortune to a worthy cause like fighting poverty in Africa, he must give at least 50% to his spoiled children. This granny tried to get around the rules by converting her million dollar fortune into currency, and shredding the money. (BTW, when you destroy currency you are effectively donating money to the national government–not sure exactly how that works in the eurozone.) She should have burned the cash and scattered the ashes in the ocean, as the National Bank of Austria has said it will replace the shredded money, and the undeserving brats will get their inheritance. Pathetic. No wonder Thomas Piketty is so obsessed with inherited wealth. What the heck is wrong with Europe?
HT: James Alexander