A recent Free Exchange article caught my eye: And in some circumstances the drop in demand induced by a supply shock may be larger than the decline in supply—a source of deflationary, rather than inflationary, pressure. This idea is explored in a new working paper by Veronica Guerrieri of the University of Chicago, Guido Lorenzoni […]

Here’s Tyler Cowen, discussing the proposed new Facebook cryptocurrency called “Libra”: 4. We are told “The association does not set monetary policy.  It mints and burns coins only in response to demand from authorized resellers.”  Maybe, of course there are hundreds of years of debate on that one, google “real bills doctrine,” noting that here […]

David Beckworth directed me to a new piece by Jeffrey Frankel: A Trade War is No Reason to Ease Monetary Policy A trade war is a negative supply shock, and central banks cannot counteract the negative effects of current policies on real incomes in the United States, the United Kingdom, and many other countries. Only […]

It’s time to update my current preferences on monetary policy: Monetary authority structure: 1.  As in the UK, monetary policy decisions should be made by a committee of monetary specialists.  They need not be economists, but they must be experts. Self-taught is fine. Financial regulatory decisions should be made by a separate (Treasury) committee, composed […]

One of my few remaining thoughtful commenters (ChrisA) left the following comment: On the UK exports being affected by tariff’s after Brexit – couldn’t that be taken care of by a fall in the pound vs the Euro? I don’t actually think a tariff war between the UK and the EU is actually going to […]