Campusland
Economics
Temporary price-level targeting: An alternative framework for monetary policy
Low nominal interest rates, low inflation, and slow economic growth pose challenges to central bankers. In particular, with estimates of the long-run equilibrium level of the real interest rate quite low, the next recession may occur at a time when the Fed has little room to cut short-term rates. As I have written previously and recent research has explored,…
The housing bubble, the credit crunch, and the Great Recession: A reply to Paul Krugman
Why was the Great Recession so deep? Certainly, the collapse of the housing bubble was the key precipitating event; falling house prices depressed consumer wealth and spending while leading to sharp reductions in residential construction. However, as I argue in a new paper and blog post, the most damaging aspect of the unwinding bubble was that it ultimately touched…
Evaluating lower-for-longer policies: Temporary price-level targeting
Despite a long and sustained recovery from the Great Recession, a number of factors—including an aging population, slow productivity growth, and subdued inflation—continue to exert downward pressure on U.S. interest rates. It seems likely that even when monetary policy is at a neutral setting, neither restraining nor stimulating the economy, interest rates will remain significantly lower than in recent…
TV prices and British queens
According to the BLS, TV prices (olive green line) fell by 94.5% between 1997 and 2015: A TV set that cost $200 in 1997 cost $11 in 2015. Today the price would presumably be even lower. Try to imagine visiting your local BestBuy and asking to look at their $11 TV sets. Of course, what’s actually going on here…
The Case for Boarding Houses
Washington’s new bill will “increase housing unit inventory by removing arbitrary limits on housing options.” In plain English, what that means is that groups of people who aren’t family will be allowed to live together. Washington is one of many states with old laws on the books prohibiting such living arrangements — a vestige of zoning regulations aimed…
How Government and Politics Work
Years ago I was on a flight out of Monterey and, as is my wont, I struck up a conversation with the passenger beside me. She was a local and somehow we got talking about the local daily newspaper, the Monterey Herald. I told her that because of its price relative to value, I had dropped it a few…
On the repeal of the Corn Laws
Don Boudreaux hosted an excellent podcast discussion on Discourse Magazine Podcast on the abolition of the Corn Laws. The debate involved Steve Davies and Douglas Irwin and Arvind Panagariya. It is worth listening to today, as it was on June 25th, 1846, that the Duke of Wellington persuaded the Lords to approve the repeal of the Corn Laws (following…
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