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Going Negative
Greg Mankiw's Blog —
Click here to read my column in tomorrow's NY Times.
Tax Cuts, Household Balance Sheets, and the Duration of Recessions
Economist's View —
... It
May Be Time for the Fed to Go Negative, by N. Gregory Mankiw, Commentary, NY
Times: ..What is the best way for an economy to escape a recession? Until
recently, most economists relied on monetary policy. ... The problem today ...
is that the Federal Reserve has done just about as much interest rate cutting as
it can. Its target for the federal funds rate is about zero, so it has turned to
other tools... ...
Sunday morning links
The Mess That Greenspan Made —
... bail-out: Too little, and late - Economist • Bloom or bust? - Globe & Mail HOUSING • When will the housing market hit bottom? - The Independent • When the Real Estate Game Cost $9.95 - NY Times • Home sellers seek help from a saint - LA Times • Home ownership: Shelter, or burden? - Economist FED/TREASURY/BANKING • Fed officials suggest worst of recession is over - Reuters • It May Be Time for the Fed to Go Negative - NY Times • Bank bailout plan's ...
Sneak Peek at Weekend Reading
Paul Kedrosky's Infectious Greed —
Here is a sneak peek at some links form my weekly Weekend Reading column at TheStreet: It May Be Time for the Fed to Go Negative (NYTimes) California asks Feds to back IOUs (SacBee) The Biofuel Bubble (BusinessWeek) Desert clash in West over solar potential, water (SF Gate) What Good Are Economists Anyway? (BusinessWeek) Renewables to spark U.S. grid revolution (Reuters) Recession slowing water investment to a drip (Reuters) ...
Sunday links: government guarantees
Abnormal Returns —
... Should the Fed contemplate pushing interest rates below zero. (NYTimes.com) ...
Observations on Negative Interest Rates
Greg Mankiw's Blog —
My article on negative interest rates generated more than the usual volume of email, sometime quite heated. While I cannot possibly respond to all of it, let me add a few wonkish comments about the topic, from a variety of perspectives: ...
Time For Mankiv To Resign
Mish's Global Economic Trend Analysis —
... I checked my watch to verify the date. A quick check showed it was April 18. Just to be sure I asked my wife Joanne and she assured me it was the 18th. Likewise my computer said it was the 18th. For a brief moment, I thought we had flashed back in time and it was April 1. April Fool's day was the only rational explanation I could come up with for a column in the New York Times by Gregory Mankiw, professor of economics at Harvard. Please consider It May Be Time for the Fed to Go Negative. At one of my recent Harvard seminars, a ...
Economist Mankiw Defends Policy of Theft
Mish's Global Economic Trend Analysis —
In case you are new to this story, Gregory Mankiw, professor of economics at Harvard, proposed negative interest rates in It May Be Time for the Fed to Go Negative. ...
Real Interest Rates & Economic Growth
Stefan Karlsson's blog —
... Greg Mankiw now proposes to fix that alleged problem. He starts by quoting a suggestion from one of his students that a year from now, the Fed would randomly pick a number and make all dollar bills with that number as its last serial number worthless, creating a negative expected return of -10% on dollar bills. That way, people would prefer to have their money in deposits even if those deposits had a negative interest rate of say 3%. ...
More on Negative Interest Rates
Greg Mankiw's Blog —
Commentary on my negative interest rate piece in the NY Times (and the follow-up here) continues to pour in. To answer the most common queries: Yes, the serial-number-lottery plan was tongue-in-cheek. The goal of mentioning it was to get people thinking about whether, as a matter of first principles, zero is really an unavoidable lower bound for interest rates. And no, I am not the devil incarnate, at least as far as I know. As to the Fed announcing a commitment to a moderate amount of inflation, let me point out that according to many macroeconomic historians, ...
Insane Psycho-Sociopathic Court Economists
GoldSeek.com —
... | Source: GoldSeek.com By: Trace Mayer, J.D. Gregory Mankiw, professor of court economics at Harvard and economic advisor to President George W. Bush, proposed negative interest rates in a recent New York Times article. Mike Shedlock, a prominent financial commentator has appropriately weighed in 19 March with ...
Instantaneous Deflation as a Macro Solution
Greg Mankiw's Blog —
In the process of making the case that I am a nut, Robert P. Murphy of the Ludwig von Mises Institute examines my column on negative interest rates and offers up a useful observation: Let's stipulate for the sake of argument that the "equilibrium real interest rate" is negative, and that the nominal interest rate goes all the way down to zero. But oh no! Given the current array of prices and the expected array of prices next year, the implied real interest rate is too high for the market to clear. What to do? Mankiw's ...
Atlas IS Shrugging
MaxedOutMama —
... It is possible that economists such as Mankiw have never heard of this gripping publication, which is why I bother to mention it here. (That would account for his apparent belief that the US citizen saves by stuffing wads of money in his or her underwear, and thus can be induced to spend by declaring one tenth of currency illegal tender in a year. In fact, the average citizen saves by either paying down debt or depositing money in the bank, and it is the bank vaults that would take the loss.) ...
Inflation and relative prices
Econbrowser —
There are persuasive reasons why we'd be better off today with an inflation rate higher than what we've seen over the last six months. But while a uniform expansion that raised all wages and prices by the same amount would be helpful, what the Fed could actually achieve in the present situation may be something less desirable.
When academic economists talk about inflation, we often think in terms of a single-good economy in which the concept refers unambiguously to an increase in the dollar price of that good. But in the real world, in any given month ...
Economic View - It May Be Time for the Fed to Go Negative - News Analysis - NYTimes.com
FinanceProfessor.com —
Now here is a creative solution! Economic View - It May Be Time for the Fed to Go Negative - News Analysis - NYTimes.com: "Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent. That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 ...
