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Further reading
FT Alphaville —
Elsewhere on Monday: - Obama’s Nobel headache - It pays to understand the mind-set - The nature of fiscal stimulus - Re-regulating hedge funds - Seven things you should know about the next chief executive of GM - Ranting against Sheila Bair - Why bother with bonds? - The quiet coup - How the CDS market is going to improve - Laid-off Wall Streeters turn to stripping (well a few of them do…) - The Fed’s new balance sheet and some concerns about monetary policy - South Park’s take on the ...
links for 2009-03-30
Economist's View —
The Fed's new balance sheet - Econbrowser
The IMF's new facility - voxeu.org
Ben Stein Watch - Felix Salmon
Rising Powers Challenge U.S. on Role in I.M.F. - NYTimes.com
U.S. Moves to Overhaul Ailing Carmakers - NYTimes.com
The GPT That Dares Not Speak Its Name - Economic Principals
Going into Shock - Noni Mausa
Economic predictions from a theory of mind - Leigh Caldwell
Managing the Fed's new balance sheet
Marginal Revolution —
... Read his whole post, which ranges more broadly than this quotation would indicate. It's one of the best blog posts written this year. Don't forget this crystal clear passage: ...
Monday links: long run risks
Abnormal Returns —
... “(T)he new Fed balance sheet has handicapped the Fed’s ability to fulfill its primary mission, which I see as promoting a stable and predictable low rate of inflation.” (Econbrowser) ...
The Daily Digest for Tuesday
InvivoAnalytics.com —
... . James Hamilton weighed in on the Fed’s new balance sheet : I would suggest first that the new Fed balance sheet represents a fundamental transformation of the role of the central bank. The whole idea behind open market operations is to make the process of creating new money completely separate from the decision of who receives any fiscal transfers. . . . A second concern I have with the new Fed balance sheet is that it has seriously compromised the independence of the central bank. . . . My third concern is that the new Fed balance sheet has handicapped the Fed’s ability to ...
The three influences on the money supply, or, why inflation lurks
SCSUScholars —
... posts highlighting how the Fed's activities in extending credit to all and sundry has exploded the balance sheet of the Fed. He asks at the end of the first post "Does the explosive growth of the monetary base ... imply uncontrollable inflationary pressures? My answer: not yet, but stay tuned." That takes us to the second post where he argues the Fed has hamstrung itself in creating these new lending facilities and tripling its liabilities. ...
Snapping ropes and breaking bricks
macroblog —
... James Hamilton of Econbrowser is concerned about the current state of monetary policy. On the blog, Jim writes:
"I would suggest first that the new Fed balance sheet represents a fundamental transformation of the role of the central bank. The whole idea behind open market operations is to make the process of creating new money completely separate from the decision of who receives any fiscal transfers. In a traditional open market operation, the Fed buys or sells an existing Treasury obligation for the same price anyone else would pay for the security. As ...
Inflation and the Fed
Economist's View —
... , but there are
respected
analysts who see it otherwise and that means the public can't be too far
behind. Here's two more that are worried (the original is quite a bit longer,
and explains the argument in more detail): ...
Bernanke’s balance sheet
FT Alphaville —
... the independent conduct of monetary policy in the pursuit of its dual mandate of ensuring maximum employment and price stability. As was also noted in the joint statement, to provide additional assurance on this score, the Federal Reserve and the Treasury have agreed to seek legislation to provide additional tools for managing bank reserves. Roughly translated: We’re aware of the inflation risk. End speech. Related links: The Federal Reserve’s Balance Sheet - Ben Bernanke The Fed’s new balance sheet - Econbrowser Bernanke to take over the world - FT ...
Hot TIPS
Streetwise Professor —
... its close cooperation with Treasury, and the rampant populism on the Hill, all raise the risk that the Fed’s independence has been compromised. Given these factors, the risk of an unprecedented inflationary spurt is appreciable. Or, to put it differently, in my view the only way we are likely to avoid a serious uptick in inflation is if the economy remains mired in near depression conditions. I estimate that the odds of a non-inflationary recovery are very low. I am not alone. James Hamilton said it better than I could : A second concern I have with the new Fed balance ...
When is rapid growth in a central bank's balance sheet not cause for concern?
macroblog —
... The unprecedented growth in the Federal Reserve's balance sheet during the past year has generated considerable debate about potential problems for the economy down the road (see for example, here, ...
