Monthly Archives: September 2010
Policy Rule Gaps as Forecasts of Currency and Interest Rate Movements
Currency strategists at the Scotiabank are using “policy rule differentials” rather than simple “interest rate differentials” in a creative way to predict interest rate and currency movements. As reported in this Bloomberg piece Taylor Rule Gap with U.S. at 15-Year … Continue reading
Posted in International Economics
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The Transparent Effect of Foreign Interest Rates on Central Bank Decisions
Last June the central bank of Norway hosted a fascinating conference in Oslo on the use of monetary policy rules in small open economies. The Norges Bank is a remarkably transparent central bank. As with the Swedish Riksbank, it announces … Continue reading
Posted in Monetary Policy
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Senate Budget Committee Reopens Debate on Policy and the Crisis
In a hearing today, the Senate Budget Committee reopened the debate about whether the stimulus packages and other federal interventions have been effective. Here is the written testimony of Alan Blinder, Mark Zandi, and me, the three economists who were … Continue reading
Posted in Financial Crisis
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Timely Views on Deflation from Governor Shirakawa
For years economists and policymakers in the United State have been expressing fears that America would enter a Japanese-style deflation and thereby experience a lost decade like Japan in the 1990s. One of the earliest examples was the October 1999 … Continue reading
Posted in Monetary Policy
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Not a Repeat of the Great Intervention
I am writing from Tokyo where I have spent a few days at the Bank of Japan. This week marked the first exchange market intervention by the Bank of Japan since March 16, 2004, a day I remember well because … Continue reading
Posted in Monetary Policy
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Proven Economic Principles
Today’s Wall Street Journal article by George Shultz, Michael Boskin, John Cogan, Allan Meltzer and me shows that the financial crisis, recession, and continued high unemployment have been caused by government policies that have deviated from proven economic principles. The … Continue reading
Posted in Teaching Economics
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Lehman Weekend
Two years ago, on Friday Sept 12, 2008, the Lehman Weekend began. Many people are still trying to figure out why the bailout of Lehman was aborted or what would have happened if there were a special bankruptcy chapter for … Continue reading
Posted in Financial Crisis
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Flying Back to Treasury on 9/11
I was in a hotel room in Tokyo when the first plane hit the World Trade Center. Recently sworn in as Under Secretary at Treasury, I was part of a delegation to Japan that included Paul O’Neill and many reporters, … Continue reading
Posted in International Economics
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Post-Crisis Changes in Principles of Economics Texts
Many have written about how the introductory economics textbook should change as a result of the crisis. In November 2008, one year after the crisis started, I addressed this question in a practical way when Mike Worls—economics editor at South-Western … Continue reading
Posted in Teaching Economics
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More on Massive Quantitative Easing
In tomorrow’s Wall Street Journal there is a symposium on monetary policy in which Richard Fisher, Rick Mishkin, Vince Reinhart, Allan Meltzer, Ron McKinnon and I participate. One of the points I make in my piece is that another massive … Continue reading
Posted in Monetary Policy
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Economics One 