151
1. A mild disagreement with @paukrugman on the measures to fight global warming in the IRA. It is all subsidies, no taxes. Maybe it was the best that could be achieved politically. But let’s not kid ourselves. It is a sure way to spend more than needed to achieve the desired goal
152
A textbook example of how not to design and not to sell a fiscal expansion. While we were worried about Italy, the UK sneaked in. We are lucky that the UK is not in the euro… Otherwise, we would be facing another euro crisis. ☹
153
A nice example of salience: relation between inflation rate and google searches for ``inflation'' for the US, from 2004 to today. From Oleg Korenok, David Munro et Jiayi Chen (2022) ideas.repec.org/p/zbw/glodps/1…. Suggests things are ok up to close to 4%.
154
Ben Bernanke is the living economist who has made the biggest contribution to world GDP. Without his actions when the financial crisis came, GDP would have collapsed much more than it did. So, on purely financial grounds, he deserves the prize (and on other grounds as well).
155
A lot of similarities between crypto and QAnon. Same anti-state sentiment, same irrationality, same herd behavior. Good reasons to worry.
156
1/6 The lag conundrum of monetary policy
Monetary policy affects activity with a lag. This enormously complicates the task of policy makers, and the design of disinflationary policy.
157
1/6 The risk of a false dawn in US inflation.
Headline inflation is likely to decrease sharply over the next few months. The reason is simple: Many of the large increases in commodity prices have started to reverse.
158
The failure of covid zero. Likely to have major implications for China and the rest of the world.
159
1/8. A point which is often lost in discussions of inflation and central bank policy. Inflation is fundamentally the outcome of the distributional conflict, between firms, workers, and taxpayers. It stops only when the various players are forced to accept the outcome.
160
7/8. It is a highly inefficient way to deal with distributional conflicts. One can/should dream of a negotiation between workers, firms, and the state, in which the outcome is achieved without triggering inflation and requiring a painful slowdown.
161
1/8 This is a great discussion, so I shall continue. Second round answer to @IvanWerning. I like very much the Werning-Lorenzoni framework. dropbox.com/s/pbsurtd5onvn… One of its merits is indeed to show that thinking in terms of distributional conflict is totally mainstream.
162
This is insane. twitter.com/chigrl/status/…
163
1. 「21世紀の財政政策」が出版されました。"Fiscal Policy under Low Interest Rates"の邦訳です。財政政策、財政赤字、債務に関心を持つすべての方にとって、本書が貴重な材料となることを願っています。
amazon.co.jp/21%E4%B8%96%E7…
164
Let's be clear. The German "non paper" proposal for the reform of EU fiscal rules, requiring in particular a decline of 0.5% in the debt to GDP (1% for high debt countries) ratio each year would be catastrophic. It would lead to the worst form of pro-cyclical fiscal policy.
Robert Solow Professor of economics emeritus, MIT
Fred Bergsten Senior Fellow, Peterson Institute for International Economics