Category Archives: Uncategorized

As the expected time at which the US will hit the current debt-ceiling approaches, with no sign of a deal, market participants’ guess at the probability that debt obligations will be defaulted on rises too.  This will act like a … Continue reading →

A couple of quick points following on from Simon Wren-Lewis’ mainlymacro post in response to Rogoff’s piece about UK austerity. Simon argues that the insurance against a flight from UK sovereign debt that ‘austerity’ provided (in quotes because, let’s face … Continue reading →

  [Title amended to copy Noah Smith’s catchier tweet of this post] I am just back from a conference on uncertainty hosted by the Federal Reserve Bank of Dallas.  John Taylor spoke over lunch about what he thought the causes … Continue reading →

Recently the Fed was criticised for talking about tapering and then, when it saw how much the yield curve and asset prices reacted, backing off.  The UK’s Monetary Policy Committee has likewise been criticised as somehow messing up forward guidance … Continue reading →

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 →

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 →

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 →