The Ramblings of an Amateur Economist

In the comments of one of Nick Rowe's recent posts , Scott Sumner has accused me of confusing objectives and tools of monetary policy: ...

Read the last post before you read this one; this post builds off of the analysis from that one. In my last post, I explained my reaso...

It's difficult to understand why people and financial institutions would willingly carry an asset that earns less interest than oth...

Most of the time, it seems that the monetarist view of inflation is pretty much correct. Inflation roughly tracks the monetary base and vel...

Imagine that there is a central bank that targets the inflation rate successfully every period because there are no real shocks in the econ...

I hope I don't make Nick Rowe [1], Scott Sumner, and their fellow Monetarists too angry by assuming that central banks can only moneti...

The word liquidity trap is somewhat ambiguous, so, for the sake of clarity, the definition I will use in the post is as follows: a liquidit...

Monetary offset , one of the major aspects of Market Monetarism , is severely hindered by the application of some basic macroeconomic theor...

The dynamics of inflation in relation to the nominal interest rate are generally assumed to be governed by the liquidity effect. That is, i...

(In this post, I will be using a slightly modified version of the model with the output-gap-indifferent monetary policy rule in my last pos...