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This is good - I found your substack through your awesome tweet thread about Rudd's paper. I'm a total outsider (former philosopher, interested in economics but not trained) and am curious why we would be so quick to dismiss either the importance of inflation expectations in influencing price levels or the Fed's role in influencing inflation expectations.

In principle, it seems like (1) people use inflation expectations to bargain all the time. Whether or not they succeed in actually getting higher wages has more to do with labor's relative power at a given time than their inflation expectations though. And (2) it seems like the Fed could definitely influence peoples' inflation expectations through its rate targeting stance; but again, whether it succeeds in actually manifesting this influence is another story.

But more importantly, I'm not so clear on why that should matter. Surely the Fed has tons of other tools in the toolbox to manage price levels. I think the real worry is that they don't know which tools are working, and why, and whether it's actually their behavior that keeps price levels behaving like they do and not factors beyond their control.

So maybe the worry is just that it's another crack in the glass of classical theories> Either way, I'd love to see more debate about whether and when we've ever been operating at economic capacity and some discussion about reverse hysteresis and the role that public spending has to play in boosting output in the longrun. But again, total rookie here.

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If you can't measure it don't talk about it, whether inflation expectations, rational expectations or animal spirits:. https://rwer.wordpress.com/2021/09/13/maybe-inflation-should-be-welcomed/

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Here, I haven´t said anything about Fed Funds rate, “tapering”, dot plots, slope of Phillips Curves, natural unemployment, output or interest rates, inflation expectations, or fiscal policy.

https://marcusnunes.substack.com/p/macroeconomic-patterns-and-stories

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Powell is gone, I am convinced...Rudd has done what many have suspected for a long time, the Emperor has no clothes, it is interesing that if you look at FOMC readings around uncertainty on unemployment, GDP and inflation the average of these three is record high. It seems an argument for much higher financial risk premium except for the fact that the Fed has so financialized the economy that link seems broken

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not to get you to dive into the political fray... but Senator Warren chastised Chair Powell over his treatment of big banks-- I'm super curious to hear your thoughts. Is she being unfair? I feel like she is... 2008 was a long time ago, and a lot has changed. I don't know what she expects him to do so, what am I missing?

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