Monthly Archives: September 2010
Beyond GDP Measures Don’t Make the US Look Better
My colleagues Chad Jones and Pete Klenow have computed a new measure of economic welfare which combines consumption, leisure, mortality, and even inequality. Their new measure is closely correlated with GDP per capita as the attached diagram from their paper … Continue reading
Posted in Teaching Economics
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Got a New Idea for Monetary Policy?
Do you have a new proposal for monetary policy? Perhaps a new policy rule? If so, it would be good to try out your idea first on a model of the economy. See how it works. Better yet, since economic … Continue reading
Posted in Monetary Policy
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A Milton Friedman Revival
Bloomberg columnist Caroline Baum laments that monetarists have “followed Milton Friedman the grave.” Monetarist, of course, is a term used to identify those who agree with the ideas of the great free-market economist who died in 2006. But I see … Continue reading
Posted in Teaching Economics
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The Taylor Rule Does Not Say Minus Six Percent
The Taylor rule says that the federal funds rate should equal 1.5 times the inflation rate plus .5 times the GDP gap plus 1. Currently the inflation rate is about 1.5 percent and the GDP gap is about -5 percent … Continue reading
Posted in Monetary Policy
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Economics One 