At the CFE, we try to pair the teaching of textbook tools with a large dose of the wisdom and common sense it takes to apply those tools astutely in real situations. We are, therefore, particularly excited about the fact that Floyd Norris has joined us, and will be teaching undergraduate classes, attending Economics Department […]
Lord make me pure, but not until 2020
In a recent post, we complained that Congress had muzzled the CBO, forbidding them from reporting budget projections until the forecasts could “reflect the tax legislation and any major decisions about spending that the Congress makes in the next few weeks.” We conjectured that the spending cuts offered up would be slated for the out […]
CBO: The dog that didn’t bark, for now
Each January the Congressional Budget Office provides a 10-year budget forecast, driven by the interplay of tax laws, spending commitments, and a 10-year economic projection. Not so in 2018. CBO received a directive from the Senate and House Budget Committee Chairs, instructing them to hold off on supplying a report until they can produce a […]
A Happy New Year for Bitcoin?
The future of Bitcoin and other cryptocurrencies does not depend on whether digital currency is a good idea—digital currency or some equivalent is clearly a good idea. What will matter is whether cryptocurrencies are as good as other approaches to digital currency. From this perspective, cryptocurrencies look a bit ridiculous. A digital currency is nothing […]
While visions of Bitcoins danced in their heads
Nothing is but branding makes it so.Hamlet, Act 2, Scene 2, sort of Bitcoin has been branded a currency, and some analysts—even some Fed economists—seem to have fallen for it, arguing that Bitcoin’s value as a transactions vehicle explains why this intrinsically useless item has market value. The trouble is that there is no evidence […]
What will the FOMC be discussing next December?
The FOMC has communicated that it is likely to raise the federal funds rate 25 basis points in its meeting today; it would be a major shift in behavior if it didn’t. Thus, the main thing many folks are talking about is what the Fed will signal in the Survey of Economic Projections (SEP) and […]
Jobs and Inflation, Dec. 2017
Eighteen months ago, in “Six Degrees of Separation between jobs and inflation,” we argued that job gains of 200,000 per month could easily continue for the next 18 to 24 months without providing significant upward pressure on inflation. Eighteen months are up, and as of today’s job report we’ve seen solid job growth of 187,00 […]
What will the Fed do? Nov. 2017 edition
Ideally, if there has been no big news about the economy since the previous FOMC meeting, the FOMC should be back-page news. And maybe as part of “normalization” we are getting back to that: tomorrow’s FOMC announcement is likely to be a very sleepy event. Note: Let’s be clear that I’m talking about Wednesday’s FOMC […]
What the next Fed chair will do
Back in normal times, the following question would have seemed peculiar: Which Fed chair candidate would choose highly accommodative policy if a large fiscal stimulus hits an economy in which the unemployment rate is already at historic lows? The question becomes stranger when we add that the Republicans in power might prefer that Chair. What […]
Yellen for Fed Chair?
I received several comments regarding the post on Jay Powell, asking whether I was implicitly stating a preference for Powell over Janet Yellen. Nope. I clearly should have been less obtuse, but I meant only to be commenting on Powell, who had become a strong favorite according to the betting pundits. The Powell piece started […]
Powell for Fed chair?
According to the folks who bet on such things, Jerome (Jay) Powell is a heavy favorite to become the next Fed chair. I have no special insights into the likely pick, but I do have a pretty good sense of Powell. I was working as a special advisor to the Fed governors when Powell arrived […]
Faust to give the Félix Neubergh Lecture
On Oct. 12, Prof. Jon Faust will be giving the Félix Nuebergh Lecture in Gothenberg, Sweden. The topic will be “The Role of Macroeconomic Policy Analysis in the Great Inflation, Great Moderation and Great Recession.” Preview: Macroeconomists now see the period since around 1960 as a succession of Greats: the Great Inflation, Great Moderation, and […]