In a September 10 analysis, Morgan Stanley economist Robert Alan Feldman looked at whether the economy is more likely to suffer inflation or deflation in the future. He thinks inflation is more likely.
Also on September 10, Morgan Stanley economist David Greenlaw examined the Federal Reserve’s options for further stimulus.
In a September 9 post, University of California, San Diego, economist James Hamilton estimated that if the Fed were to buy an additional $400 billion in 10-year Treasury securities it would only lower the yield by 14 basis points. (Lately, the yield on the 10-year bond has been about 2.6 percent.)
In a September 8 post, Stanford economist John Taylor was critical of the volatility of monetary policy. He also said that his research shows little reduction in long-term interest rates from increases in the money supply over the last two years.
In a September 7 post, economist David Beckworth examined the steady decline in inflationary expectations, with actual deflation expected shortly if the trend continues.
On September 1, Federal Reserve Bank of St. Louis economist David Wheelock posted a commentary that discussed the relationship between the monetary base and bank lending.
Also on September 1, Stanford economist John Taylor took issue with analysts who say that the so-called Taylor Rule would require a federal funds rate of minus six percent. He says that in fact the rule would set a fed funds rate of about what it currently is.
On August 30, University of Oregon economist Tim Duy posted a commentary that was highly critical of Ben Bernanke’s Jackson Hole speech. Duy feels that the Fed is being excessively passive in using the tools at its disposal to alleviate deflationary conditions and stimulate growth. On August 31, Federal Reserve Bank of St. Louis president Jim Bullard responded to Duy’s criticism.
In an August 20 study, JPMorgan economist Masamichi Adachi examined the role of monetary policy in Japan’s deflationary recession. It notes that the Bank of Japan made aggressive efforts to expand the money supply, but it had no effect because the money remained idle.
Also on August 20, JPMorgan Chase published a report showing that demand for bank loans had begun to rise and bank lending standards were beginning to ease.
I last posted items on this topic on August 30.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).