Scott Sumner | TalkMarkets | Page 1
Chair of Monetary Policy
Contributor's Links: The Money Illusion
Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University. He is also Professor Emeritus at Bentley University and Research Fellow at the Independent Institute. In his writing and research, Sumner specializes in monetary policy, the role of ...more

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Externalities Should Be Handled With Care
History is almost infinitely complex, and thus any attempt to develop a ledger of net moral debits and credits based on positive and negative externalities will end up foundering on a host of arbitrary judgments.
Reform Is A Luxury Good
Several decades of neoliberal economic reforms brought about the greatest global reduction in poverty ever achieved, by far. But success brings laziness, and many countries began to take their achievements for granted.
Now Do Japan
Japanese workers have gone from almost twice as well paid as American workers in the mid-1990s, to just over 1/3 as well paid today.
Hey Teacher, Call On Me!
Do you recall that student back in middle school, frantically waving his hand trying to get the teacher to call on him? That’s how I feel when I read the following sort of news story:
The Hawkish Case
The Fed is not reacting to unexpected swings in aggregate demand, the Fed is creating unexpected swings in aggregate demand, through its clumsy interest rate targeting system and lack of level targeting.
Some Counterintuitive Thoughts On Monetary Policy
​​​​​​​Here are five observations about recent trends in monetary policy.
Time To Add The Epicycles
Monetary policy is not interest rates, it is the market forecast of future NGDP.
Is Inflation Re-Accelerating?
Inflation data is often noisy and unreliable, for a wide variety of reasons.
"All The New Jobs Are Going To Immigrants"
The boomer generation is very large. Each year, several million boomers decide to retire. Each year, a roughly equal number of young native-born Americans enter the labor force.
The Fed Is Clumsy
The Fed should not be targeting interest rates. But if it insists on doing so, then the most efficient regime would adjust the fed funds rate target by basis points (i.e., 0.01%), not quarter-point increments.
Is The Natural Rate Of Unemployment Turning Higher?
At the national level, the natural rate of unemployment seems to have fallen from roughly 6% in much of the 1970s and 1980s, to something closer to 3.5% in the late 2010s.
Why No Recession (So Far)?
Last year, the consensus view of economists called for a recession in 2023. There was some reason to believe that a recession was a bit more likely than usual. So, why did no recession occur in 2023? I see three reasons.
Price Indices: Constant Utility Or Constant Quantity?
The Michigan survey of 12-month inflation expectations generally hovers close to 3% from 2000 to 2020, even as measured inflation averaged a bit under 2%.
Does Taxing Capital Encourage Capital Formation?
An economy where each organization is self-sufficient is much less efficient than an economy structured around specialization and trade.
The Decline Of Economics
In recent years, I’ve been bemoaning a new “dark age of macroeconomics”. I know less about current trends in micro, and thus was interested in these comments by Steven Levitt.
Powell Is Wrong About Inflation
In any economy, some prices will rise faster than others. Instead of singling out the prices of various goods and services, the Fed needs to look in the mirror.
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