Economy Blogjamming !!
Over at Pajamas Media's blogjam, another PhD economist makes me feel like an idiot for questioning theory when reality contradits it...
In the post below I suggested that we have a mini Volcker/Reagan thing going on, as pro-gowth tax cuts set us on a course of expansion and tightening monetary policy wards off inflation.
I guess James Hamilton hasn't heard of this Volcker/Reagan thing:
"It doesn't make sense to be trying to stimulate the economy with fiscal policy and contract it with monetary policy."
I'm no PhD-holding professor, but might I suggest that removing accomodation to monetary policy is not a linear notion, to wit raising the fed funds target rate from 2% to 4.5% is alot different than raising it 250 bps starting at a higher level, say from 5.5% to 8% ??
We've had rates go up, what, 12 times, and a 30 year fixed is under 6.5%? For a PhD, Hamilton's thinking seems awfully rigid to me. Ah, what do I know.
P.S. Although another PhD economist makes me look smart by reiterating my thoughts about Iran.
In the post below I suggested that we have a mini Volcker/Reagan thing going on, as pro-gowth tax cuts set us on a course of expansion and tightening monetary policy wards off inflation.
I guess James Hamilton hasn't heard of this Volcker/Reagan thing:
"It doesn't make sense to be trying to stimulate the economy with fiscal policy and contract it with monetary policy."
I'm no PhD-holding professor, but might I suggest that removing accomodation to monetary policy is not a linear notion, to wit raising the fed funds target rate from 2% to 4.5% is alot different than raising it 250 bps starting at a higher level, say from 5.5% to 8% ??
We've had rates go up, what, 12 times, and a 30 year fixed is under 6.5%? For a PhD, Hamilton's thinking seems awfully rigid to me. Ah, what do I know.
P.S. Although another PhD economist makes me look smart by reiterating my thoughts about Iran.
posted by Donny Baseball at 4:20 PM
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