Monday, December 23, 2013
Scott Sumner — How many economists can answer this question?
What Scott sumner illustrates is that he cannot. This post makes absolutely clear how Prof. Sumner is clueless about about monetary economics and monetary operations, and how monetarism is bonkers.
The Money Illusion
How many economists can answer this question?
Scott Sumner | Professor of Economics, Bentley University
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8 comments:
December 23, 2013: banksters celebrate 100 years of absolute sovereignty!
http://failedevolution.blogspot.gr/2013/12/december-23-2013-banksters-celebrate_23.html
Amazing amount of errors in one single post! Every sentence has like 10 errors and mistakes.
This one was pure genius:
"Now let’s think about the effect of a sudden and instantaneous 1% boost in the monetary base. Contrary to most macro models, there is an immediate impact on NGDP, although almost certainly less than 1%.... So NGDP might rise by 0.2%, and V might fall by 0.8%, within seconds."
"Speed of light puts a limit on the velocity of money." Wow. Not only is he a great economists, but also a buddying physicist.
Its time to start whacking Sumner with a cane. He's gone overboard with the monetarist schtick.
Who is this guy and why does he matter?
Sumner and a few others called market monetarists have been proposing NGDP targeting as a way for the Fed to get past the obstacles it has encountered in reviving the economy with monetary policy. It's being taken seriously of late by some in the mainstream, and it's considered competition to MMT in the policy world as an alternative.
Sumner repeats “NGDP” in every other sentence he writes, however it’s important not to conflate NGDP with his monetarist ideas. That is, it would be possible to target NGDP using fiscal policy, or the combination of fiscal and monetary policy which I think most MMTers favour (i.e. simply creating new money and spending it, come a recession).
The metonymy here is "physics" then the associated false metaphors which follow are:
mechanism, velocity, impact, boosts, neutral, inflation, strong, heavy lifting, faster, speed of light,
Thats about all I can see....
rsp,
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