15. All MMT people should watch Chris Sims talk about how he thinks money and inflation work. Also, all MMT people should dress in gold spandex and throw tomatoes at cars while playing "She Loves You" by the Beatles on kazoos and doing a little bow-legged jig.Noahpinion
Thursday Roundup, 8/28/2014
Noah Smith | Assistant Professor of Finance, Stony Brook University
Not MMT, but interesting comparison of the monetarist theory of the price level and fiscal theory of the price level. A step in the right direction though.
Not MMT, but interesting comparison of the monetarist theory of the price level and fiscal theory of the price level. A step in the right direction though.
The most important thing you'll ever need to Noah about
ReplyDelete"interesting comparison of the monetarist theory of the price level and fiscal theory of the price level"
ReplyDeleteIt is 'better' than vanilla monetarist view but remains confused and insufficiently complex. I never like to plug macro data in and guess what expectations are/were/will be to make it all fit. Leaves room for fudging and BS. Assume most people knew/know/care what past/present/future 'primary' surpluses were and how they related to the stock of debt and how they came to the conclusions about price levels and it's an ugly process. I like models with real mechanisms that don't depend on expectations as heavily, unemployment, income and tax data, measured prices, grain stocks, oil production. Real measured quantities rather than theories about what people expect.
If I want to know about expectations, I'll look at future or options probabilities but understand that they change, every billionth of a second or so.