tag:blogger.com,1999:blog-3621026.post6993722767657686430..comments2024-03-28T10:25:22.825+01:00Comments on Robert's Stochastic thoughts: Just when I thought it was safe to get back in the money boxRoberthttp://www.blogger.com/profile/14455788499385673507noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3621026.post-36517482187633374232012-12-21T03:03:37.339+01:002012-12-21T03:03:37.339+01:00>>In this post, I commented on the post to w...>>In this post, I commented on the post to which I linked. I didn't say that he is wrong in every way about everything. I didn't say all of his past predictions are wrong. I only note that many of his predictions were wrong and he didn't admit it in the post.<<<br /><br />Okay. Apologies for misreading you.<br /><br />The thing is though that the Fed did not, in fact, institute a higher inflation target. They said they wouldn't move from ZIRP until they crossed 2.5%, but their current target hasn't really changed.<br /><br />Pretty sure Yglesias wants higher expected inflation in the forecasts, with the specific target being a forecast target. Since they haven't done that, then they haven't yet done what he wants. I guess I could be misreading him.<br /><br />>>I disagree with you about "More stimulatory monetary policy" I think it is currently essentially impossible. Not undesireable but impossible. <<<br /><br />Some people advocate targeting a higher inflation forecast. They think it would work. <br /><br />The Fed hasn't targeted a higher forecast.<br /><br />I'm an everything-and-the-kitchen-sink sort of guy. I want them to target a higher forecast. (I also want more action from Congress, but...) If they were to announce at their next meeting that they were targeting an inflation forecast of 3 or 4%, price level targeting to correct for past misses, and that they'd do everything necessary to hit that target, I'd expect to see immediate reaction from the markets. I don't even think we'd have to wait a day later.<br /><br />I could be wrong about this. But I wouldn't personally claim that more aggressive monetary policy is essentially impossible when they haven't taken one significant action that many people are suggesting would make a difference.Hellestalnoreply@blogger.comtag:blogger.com,1999:blog-3621026.post-15700500057158370002012-12-20T20:39:42.408+01:002012-12-20T20:39:42.408+01:00I read Yglesias on monetary policy only occasional...I read Yglesias on monetary policy only occasionally. I have not been surprised by what I read (once I realize the post is on monetary policy) in years. <br /><br />I think he has made confident assertions that are contradicted by the data (30 year old data by the way). <br /><br />In this post, I commented on the post to which I linked. I didn't say that he is wrong in every way about everything. I didn't say all of his past predictions are wrong. I only note that many of his predictions were wrong and he didn't admit it in the post.<br /><br />The latest failure was, first of all, huge and second of all less than a week old. The reference to last Thursday (in a tweet to Yglesias) was a reference to the then most recently past Thursday December 12 2012. Do you know what happened that day which is relevant ?<br /><br />I disagree with you about "More stimulatory monetary policy" I think it is currently essentially impossible. Not undesireable but impossible. The weasel word "essentially" is there because I think that US monetary policy can not stimulate much more or significantly more. I guess it could cause GDP increased by at least 0.0001% (which is a good chunk of change). <br /><br />I generally think monetary policy is very effective. Do you at least understand why I think things are different now ?<br /><br /> I think that the events of Thursday 13 2012 amount pretty much to proof of my claim. Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-82385148133980317092012-12-19T06:30:20.676+01:002012-12-19T06:30:20.676+01:00"I have a rule that I don't read Yglesias..."I have a rule that I don't read Yglesias's posts on monetary policy as they cause me to become rude." Oh? But in your comment to Yglesias you say: "However, instead of noting the utter total failure of your past predictions...." These two statements are utterly contradictory.<br /><br />You can't possibly know that Yglesias is so wrong, utterly and totally, if you don't read him consistently, <i>as you have already admitted</i>. Reading one monetary post every now and then doesn't justify such a comment. <br /><br />This is true even if you are so perfectly right about everything you've said. I say this as no great fan of Yglesias (though I do support more aggressive monetary policy than what the Fed and other central banks are currently doing).Hellestalnoreply@blogger.com