Monthly Archives: September 2013

Central bank solvency, QE and the price level

This post is prompted by an exchange on twitter with Noah Smith [which you can see here] about why some people worry about the effects of QE on central bank solvency and eventually the price level. In short, the argument … Continue reading

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Puzzling differences between QE at the Fed and the Bank of England

On Tuesday this week, the FOMC decided not to begin to reduce the scale of its monthly asset purchases, as Bernanke had previously signalled it might.  This highlighted for me the starkly different QE policies that the Fed has compared … Continue reading

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The supposed benefits of reducing uncertainty via forward guidance constitute another transparency mishap for the MPC

One of the benefits of forward guidance that the MPC is counting on, and has trumpeted, is that it will reduce uncertainty about future interest rates.   Lower uncertainty should increase spending as economic agents need to put less aside to … Continue reading

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Steve Williamson, the recession, and New Keynesian economics

This recent post by Steve Williamson explains, far better than I did, why no more conventional stimulus is needed in the US.  It’s an argument that carries over fairly neatly to the UK.  And the sort of analysis that confronts … Continue reading

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Comments on retrospective guidance on forward guidance from the BoE

The Bank of England has been trying to clarify what it was doing when it launched its policy of forward guidance, committing not to think about tightening monetary policy until unemployment fell to 7% (provided….).  The fog is lifting somewhat, … Continue reading

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The Bank of England won’t and shouldn’t try to cap house price increases

A UK, housing-industry lobby group, the Royal Institution for Chartered Surveyors, recently called for the Bank of England to try to ‘cap’ annual house price increases at 5%.  This is in the context of evidence that house prices are accelerating … Continue reading

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Imagine a counterfactual world in which George Osborne understood the deep irony in his speech…

Notice two arguments in George Osborne’s ‘mission accomplished’ speech. 1.  After several years of declining or stagnant output, we at last have evidence of  moderate growth in official data and other positive, survey indicators.  This demonstrates that those that argued … Continue reading

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