- “Premise 1: The only coherent way of characterizing monetary policy as being either too “easy” or “tight” is relative to the policy stance expected to achieve the central bank’s goals.Premise 2: “Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero.”
Premise 3: After mid-2008, and especially in early October, the expected growth in the price level and nominal GDP fell increasingly far below the Fed’s implicit target.”
Scott Sumner reviews a decade’s worth of blogging about one topic, and one topic only – his understanding of monetary theory. The three premises, and the conclusions, policies and problems that arise from there is what the next ten ears have been about. There are two reasons why reading this post is worthwhile. Number one, it helps you understand (I think) monetary policy better. This is true irrespective of whether or not you agree with him. Second, and perhaps more importantly, if you had to write down three ideas about which you could continue to write for the next decade – what would those ideas be? I’m still struggling to find an answer myself!
- “There’s a different thrill here for me which is actually the thrill of refutation of confirmation. With theory it’s almost like it emerges out of nothing. And really it’s only in our heads, it’s not something that we have seen before. It is a pure outcome of imagination and there’s a thrilling magnetism to that because that imagination might be right. For me that is the most amazing thing, being guided only by mathematics.”‘The correct analogy is that there’s this singular somewhere in the ocean and you don’t know where — there is only one giant white whale and you need to go kill it because it bit your leg off.””
Longreads.com, if you are not aware of it already, is just a fantastic website, full of hidden and not-so-hidden treasures. This particular piece was commissioned by Long Reads itself, and is worth reading because of the search for the so called ninth planet, but also because it explains why you should read (and re-read) Moby Dick – because reading Moby Dick helps you understand the link between monetary policy and the hunt for a planet that should exist.
- “Solving problems of will requires giving the poorest citizens information and the political heft to hold their leaders accountable. That is best accomplished by strengthening democratic institutions. Poverty is political: Solving problems of will, like problems of capacity, requires rolling up our sleeves and working with the governments in the countries where the poor live to redistribute not only income, but also power.”
There is much to ponder upon, and at least in my case, disagree with in this article. Read especially the part about India’s space program. But that being said, the article itself is worth reading because it highlights the problems of thinking about poverty – and doing the thinking across space and time. And that solving poverty requires institutional growth is a well understood concept in development economics – but not necessarily outside it.
- “It is true that most people are disengaged from serious news, and vote with their guts rather than their heads, or being guided by friends rather than a close reading of policy analysis. That does not make them fools.There is much to concern me in the current political information environment. I worry (partly selfishly) that it is harder than ever to sustain a business that provides serious journalism. I worry that politicians around the world are doing their best to politicise what should be apolitical, to smear independent analysis and demean expertise.I worry that there is far too little transparency over political advertising in the digital age: we don’t know who is paying for what message to be shown to whom.The free press — and healthy democratic discourse — faces some existential problems. Fake news ain’t one.”
The always excellent Tim Harford on why we overrate Fake News, and should maybe not spend so much time worrying about it – and that the world is saner than it might appear…
- “Soon, I will experiment with “atemporality.” For days or weeks at a time, I will escape the present moment and only consume content published in a different decade. For example, if I want to learn about the 1970s, all my media consumption will consist of books, videos, and interviews published in the 1970s. By doing so, I’ll embody the mindset of people in a bygone era and gain new perspectives on the here and now.Everything has been said before. The big concepts aren’t new. You’ll find them in old works. Nassim Taleb calls this the Lindy Effect: “The longer something has been in print, the longer it will remain in print and the higher value it is.”
With just a couple taps, we can transform our relationship with time, ignite our sense of history and escape the Never-Ending Now.”
… David Perell has some interesting ideas about how we might solve the problem Tim Harford speaks about above. One way of escaping Fake News, is to escape news itself. Maybe not for ever, and maybe not everyday – but escaping into the past by using the tools now available to us is a good idea.