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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 ... more

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Recessions In A Post-Inflation World
In the past, some recessions were at least partly intentional. When inflation rose to unacceptable levels, the Fed tightened monetary policy to slow NGDP growth. A recession occurred.
Why Does Australia Have Mini-Recessions?
Australia’s last two actual recessions occurred around 1982-83 and 1990-91 when unemployment rose by about 5.0%. Both were large recessions. During the three mini-recessions, the unemployment rate rose by 1.0% to 2.0%, before falling back.
If You Aren’t Confused By The Lack Of Mini-recessions, Then You Don’t Understand The Issue
Everyone should agree that some factor causes recessions in the US, on average once about every 5 years.
Pay Attention To What People Are Not Talking About
Revenues increased by 4%, roughly in line with nominal GDP. Spending soared by 8.25%, more than twice as fast as NGDP. The budget deficit increased from $779 billion to $984 billion.
The China (Manipulation) Shock And The (Mostly) Trump Fiscal Shock
If the economists who worry about currency manipulation are correct, then recent fiscal policy has damaged the US industrial sector far more than the peak period of Chinese currency manipulation.
Trump Failed To Save Big Coal; Can Warren Succeed?
One tactic that Trump did not try would be to help coal by putting its competitors out of business.Perhaps the coal barons should take a look at Elizabeth Warren’s policy proposals.
Two Plus Two Is Four (Connect The Dots)
Jay Powell has a bland speaking style, but if you listen carefully to the content then his press conferences can be quite interesting.
The Economy Is Racing Ahead At 2%
Many people have trouble interpreting growth data. There’s a tendency to conflate the normal rate of growth in an expansion with the long-run trend rate of growth in RGDP.
Stall Speed And Mini-Recessions
Mini-earthquakes are much more common than big earthquakes, so why isn’t the same true of recessions? Why is it that when the unemployment rate jumps by more than a very small amount, it eventually rises by more than 2%.
How Strong Is The Case For Helicopter Drops?
If there’s a shortage of safe assets, then borrow money to create a sovereign wealth fund. But with trillion dollar budget deficits I doubt there’s a shortage of safe assets.
Monetary Offset Is More Mainstream Than You Think
I frequently argue that the fiscal multiplier is roughly zero in an economy where the central bank targets some variable linked to aggregate demand, such as inflation or NGDP.
Strange Respect For Central Banks
In basic macro theory, the path of NGDP is determined by monetary policy. Recessions occur when NGDP growth falls suddenly and unexpectedly.
Rethinking Recessions
The world will see an increasing number of “phony recessions” in the 21st century—recessions with falling output but strong labor markets. The Phillips Curve is now defunct; Okun’s Law is next.
Market Design Bleg
Some people on Wall Street argue that conventional Treasury bonds are preferred to TIPS, and hence the TIPS spread underestimates actual market inflation expectations. I’m inclined to agree.
The US Is Losing The Trade War, And That’s Good
It will be some time before we know the details of the agreement, but China has made vague commitments in the past that haven’t ended up meaning very much. Why should they?
The Low Interest Rate Century
Ten-year bond yields are still 20 basis points above the 2016 lows, while 30-year bond yields have been hitting all-time record lows. Why the difference?
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