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Wednesday, September 9, 2015

Some evening reading

Very busy tomorrow - first work, then school. Long day. Let this keep you busy tomorrow:

WSJ RTE - job openings rise to record high. Firings continue to drop, so employers are desperate to keep their existing workforce. But openings are remaining unfilled because employers are too fucking greedy to offer decent enough wages to entice new hires.

Bespoke - JOLTS: total job openings soar. That's supposedly what made the market puke this afternoon. I doubt it. I think it was just third-world dictators selling stock so they can transfer cash from the Isle of Man to some new tax haven account, say in Guernsey.

Mark Thoma - the Fed must act soon? Again Thoma gets his dander all up about a bunch of economists who don't work at U Oregon. Well, at least he reminds us of something I personally forgot about Stanley Fisher:
In any case, if you are a hawk and want rates up, what do you argue at this point? First, that labor markets are tightening (he ignores the secular stagnation point others use to argue labor markets are tighter than they seem), and inflation is just around the corner (as it always is if you are Richard Fisher, go back and look at what he has been saying throughout the crisis -- inflation has always been just ahead)
On a sociological note, then, I wonder if the Fed always discounts the blatherings of members who've proven themselves utterly incompetent, even unable to listen to their fellow Fed members who have explained precisely why there is no inflation, such as Ben Bernanke, or even:

Narayana Kocherlakota - public debt and the long-run neutral interest rate. Here's the intro:
In the first part of the talk, I examine the behavior of the yields to Treasury Inflation-Protected Securities (that is, TIPS) and the yields to nominal Treasuries over the past decade. Using this evidence, I argue that, over that period of time, there has been a notable decline in the long-run neutral real interest rate. By the long-run neutral real interest rate, I mean the real interest rate that I expect to prevail when the economy is at maximum employment and inflation is at the central bank’s target.

In the second part of my talk, I discuss two costs associated with the decline in the long-run neutral real interest rate. The first cost is that there is an increased risk that monetary policymakers will be constrained by the lower bound on the nominal interest rate. The second cost is that there is an increased risk of financial instability.

Finally, I discuss how fiscal policy can be used to increase the long-run neutral real interest rate.
Which, btw, is why I keep giving you links to economists who are screaming bloody murder that all this time governments have been using contractionary fiscal policy and thus keeping their central banks pinned to the ZLB. Anyway, N-to-the-K writes a rollicking good speech here, which Stanley Fisher never bothered to read because he's still freaking out about inflation.

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