An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Pages
▼
Pages
▼
Thursday, March 20, 2014
Andrea Terzi — The Old Lady (of Threadneedle Street) fails to get an ‘A’
Andrea Terzi says, not so fast, or they'll put one over on you. (They are still monetarists.)
IMO, this is the most clear-headed observation on the BoE paper.
It's worth pointing out that one of the truest believers in monetarism, the godfather of market monetarists, Robert Hetzel, is entirely on side with these operational aspects.
The irrelevance of the money multiplier, reverse causality, an endogenous money supply -- they're critical to understanding the operational aspects but they can be easily incorporated in a monetarist model with a natural rate of interest and an inflation/NGDP targeting central bank.
IMO, this is the most clear-headed observation on the BoE paper.
ReplyDeleteIt's worth pointing out that one of the truest believers in monetarism, the godfather of market monetarists, Robert Hetzel, is entirely on side with these operational aspects.
I wrote about this last year:
http://fictionalbarking.blogspot.ca/2013/01/does-endogenous-nature-of-money-weaken.html
The irrelevance of the money multiplier, reverse causality, an endogenous money supply -- they're critical to understanding the operational aspects but they can be easily incorporated in a monetarist model with a natural rate of interest and an inflation/NGDP targeting central bank.
"In observing, you will be observing, and may by no means be perceiving," Acts 28:26
ReplyDeleteYes they can observe (blepontes) but that STILL doesn't mean they can perceive (idete) what they are observing...
If you don't perceive the authority you don't perceive anything in these regards...
rsp,