Monthly Archives: January 2015

Did John Taylor get us stuck at the ZLB?

Paul Krugman picks up on my post about proposed legislation to get the Fed to pick a policy rule.  The legislation is being championed by John Taylor because he thinks that the reason we got into this mess was because … Continue reading

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RIP the primary surplus

Any negotiations over debt relief between Greece and the Troika can no longer focus on the primary surplus.  There is clearly a sharp contraction under way, amplified by a decline in funding for Greek banks.  Whatever primary surplus there was … Continue reading

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No legislation on the Taylor Rule please

John Taylor and Alan Blinder have been exchanging op-eds in the US press on a bill before Congress now that, if passed, will force the Fed to ‘describe’ its preferred rule for monetary policy. I posted before here on why … Continue reading

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Post-Syriza post

There are many positives and negatives in the Syriza victory. The most obvious positive in the Syriza result is that especially in a young and fragile democracy, it’s good for the established politicians to be kicked out once in a … Continue reading

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Greece’s fragile primary budget surplus is not much of a bargaining chip

One reason cited [1] for why Syriza will be able to talk tough with the Troika, presuming it wins today, and can form a government, is that it has a healthy [circa 5%] primary budget surplus.  That’s the difference between … Continue reading

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On the lack of equity purchases in the ECB QE plan

There’s disappointment from some that the new ECB QE plan won’t incorporate the purchase of equities.  A few points. 1.  Equities are issued by companies that can!  [Don’t ever criticise this blog for lack of depth on finance matters].  And … Continue reading

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QE as debt management means ECB vs 19 DMOs

Larry Summers and others have wondered how much the US Treasury’s tilt towards easing undid the Fed’s program of quantitative easing, pointing out that the central bank stimulus was hampered by an uncoordinated and opportunistic change in issuance as longer … Continue reading

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ECB QE: get rid of ‘but below’ to sharpen open ended promise

So, ECB QE surprised a little.  60bn per month, not 50.  A re-emphasis of the determination to buy private sector assets too.  Most importantly, stressing that the purchases were open-ended, to be continued until there was a sustained improvement in … Continue reading

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ECB QE. Much too late and not to be counted on.

That’s my view, and for a few reasons. First, the impact of macroeconomic policies is partly about how they affect expectations.  The slow, drawn out, reluctant, piecemeal way that the ECB has handled the crisis so far [OMT excepted, that … Continue reading

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Swiss National Bank, or Swiss Private Seigniorage Machine?

One speculation in the blogosphere – for example in Gawyn Davies’ FT blog – is that the peculiar ownership structure of the Swiss National Bank is behind its decision to abandon the exchange rate cap last week. Modern central banks … Continue reading

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