Monthly Archives: March 2016

Bloomberg getting dotty

This editorial from Bloomberg calls for the Fed ‘dot plots’ to go. It notes that the dot plot does not contain individual FOMC members’ forecasts of what they think is going to happen to rates, noting disparagingly that instead, it … Continue reading

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Joining the dots

I read today that James Bullard is disaffected with the dot-plots, and considered pulling out of them unilaterally, reserving his dots for himself. I think this would be a mistake, for several reasons. At some level, a communication strategy has … Continue reading

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Rajan’s pie in the sky

This from Rajan, Governor of India’s Reserve Bank is worth a read. It opines on the need for more monetary policy coordination, something I think is pure pie-in-the-sky, and so much so that I presume the words are there just … Continue reading

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Solving deflation with a monetary starting-over

Several times in monetary history, a government has tried to stem hyperinflation by re-denominating its currency.  Pesos become ‘New Pesos’. Naira become ‘New Naira’.  Lev become ‘New Lev’. This allows the authorities to cross off a few noughts on the … Continue reading

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Douglas Carswell, Brexit, and the BoE’s independence

I saw on Twitter today that Douglas Carswell responded to the March MPC minutes, which revealed that the Committee thought that uncertainty about the outcome of the referendum on EU membership had caused Sterling to fall, and may be depressing … Continue reading

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The golden rule of borrowing to invest

John McDonnell has committed his party to a version of the ‘golden rule’ for public finances.  A government in which he was Chancellor would only borrow to invest.  Except when monetary policy was hampered by the zero lower bound. The … Continue reading

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Instrument forecasts for the Fed, HMT but not the BoE

A quick post on a hobby-horse of mine. Today, the Fed released its economic projections, including the famous ‘dot charts’ where FOMC members project what they think should happen to the Fed Funds Rates. By contrast, the Bank of England’s … Continue reading

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We should long for fiscal policy, and budgets, to be boring

The UK financial press is full of pent up excitement about the budget.  Including talk of money ‘behind the sofa’ being replaced with the metaphorically transposed ‘black hole’, and how George Osborne will respond. We should all long for fiscal … Continue reading

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How to minimise the credibility damage of a rise in the inflation target

I had an interesting exchange with Malcolm Barr at JP Morgan via email.  He made two points that were food for thought. Both are aimed at finding ways to minimise the risk that a rise in the inflation target was … Continue reading

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Making ECB corporate bond buying ‘fairer’ and better targeted

The ECB announced this week that it was going to start buying investment grade corporate bonds.  Several people in my Twitter feed pointed out that there was a problem with this.  This chart posted on marginal revolution by Tyler Cowen … Continue reading

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