tag:blogger.com,1999:blog-582368152716771238.post3794954706201881363..comments2024-03-28T09:32:23.535-05:00Comments on The Grumpy Economist: Central banks as central plannersJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-582368152716771238.post-40315376793759525212016-03-29T14:47:54.462-05:002016-03-29T14:47:54.462-05:00C3B is a better abbreviation for counter-cyclical ...C3B is a better abbreviation for counter-cyclical capital buffer (in the tradition of C3I, or Command, Control, Communications & Intelligence in defense. The mixed caps-lowercase will only obscure an already opaque topic.Ecoute Sauvagehttps://www.blogger.com/profile/16322296385474846302noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-79080124498740207062016-03-29T07:22:01.023-05:002016-03-29T07:22:01.023-05:00There is a huge distinction between the Federal go...There is a huge distinction between the Federal government and the Fed allocating capital.The Donkhttps://www.blogger.com/profile/14153840277624094270noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-30247167875703909562016-03-28T00:48:17.334-05:002016-03-28T00:48:17.334-05:00Ben,
"Would it not be better to place the ce...Ben,<br /><br />"Would it not be better to place the central bank into the Treasury Department and have the President allocate central bank resources along with the other resources the federal government is allocating? "<br /><br />The first two "central banks" of the United States were arms of the Federal Government:<br /><br />Active 1791 to 1811<br />https://en.wikipedia.org/wiki/First_Bank_of_the_United_States<br /><br />Active 1816 to 1836<br />https://en.wikipedia.org/wiki/Second_Bank_of_the_United_States<br /><br />As far as allocating resources, the power to borrow, tax, and spend lies with the Legislative branch of the Federal Government, not the Executive Branch (President / Treasury Department).FRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-38540901204462402242016-03-27T18:57:49.119-05:002016-03-27T18:57:49.119-05:00Noyta CCCP.
It was on postage stamps. Noyta CCCP.<br />It was on postage stamps. Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-41350012087259685162016-03-27T01:49:42.310-05:002016-03-27T01:49:42.310-05:00"countercyclical capital buffer (CCyB) "..."countercyclical capital buffer (CCyB) "<br /><br />Why not CCCB? Or does that remind too many people of CCCP?<br /><br />[Extra points for people under 30 who know without Goggling what CCCP refers to.}Fat Manhttps://www.blogger.com/profile/09554029467445000453noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-41313494873238872252016-03-26T23:40:55.163-05:002016-03-26T23:40:55.163-05:00Great post. Wish I had written it. Lower-case is h...Great post. Wish I had written it. Lower-case is hip in acronyms. Who knew?<br /><br />The federal government already allocates credit and resources continuously and extensively. Consider that $1 trillion dollars a year is allocated to national security industries (DOD, VA, DHS, black budget, debt service). Then we have extensive rural subsidies as well. Would it not be better to place the central bank into the Treasury Department and have the President allocate central bank resources along with the other resources the federal government is allocating? <br /><br />If we are going to have a planned economy, let's just do it.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-12239660225343689192016-03-26T22:49:52.933-05:002016-03-26T22:49:52.933-05:00Great post. Wish I had written it. Lower-case is h...Great post. Wish I had written it. Lower-case is hip in acronyms. Who knew?<br /><br />The federal government already allocates credit and resources continuously and extensively. Consider that $1 trillion dollars a year is allocated to national security industries (DOD, VA, DHS, black budget, debt service). Then we have extensive rural subsidies as well. Would it not be better to place the central bank into the Treasury Department and have the President allocate central bank resources along with the other resources the federal government is allocating? <br /><br />If we are going to have a planned economy, let's just do it.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-89428680122236413102016-03-26T20:37:36.125-05:002016-03-26T20:37:36.125-05:00"... our central bankers are peddling the med..."... our central bankers are peddling the medieval distinction between "real" and "financial" investment. Yes, ordinary Joe can be excused from this fallacy. But people with economics PhDs are supposed to understand that every asset is also a liability."<br /><br />Well, I don't have that PhD, but I do have <a href="https://en.wikipedia.org/wiki/Accounting_equation" rel="nofollow">Wikipedia</a>: <b>Assets = Capital + Liabilities</b><br /><br />I hope this means policy makers propose to give debt less preferential tax treatment than equity. So that wealth holders will want to convert some of their debt assets to equity, reducing liabilities in the process. It seems to me that this would boost capital.<br /><br />"To be clear, I'm all for capital. Lots and lots of capital." -- John H. Cochrane<br /><br />Also, rather than the word pair "financial" and "real" or the more commonly used "financial" and "nonfinancial", I prefer the pairing "financial" and "productive" -- or even "nonproductive" and "productive".<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-44496247070185030362016-03-26T20:05:26.781-05:002016-03-26T20:05:26.781-05:00"In the United States, the politicians who ar..."In the United States, the politicians who are most opposed to what the Fed has been doing are the same ones making the mistakes the Fed is trying to compensate for."<br /><br />Exactly. Congress creates an economic environment that is unworkable, then complains that the Fed won't make it work.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-46200194597865126012016-03-26T14:48:34.789-05:002016-03-26T14:48:34.789-05:00sorry - that should be Camel case not Camel font.sorry - that should be Camel case not Camel font.Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-83088455843632270302016-03-26T14:46:15.875-05:002016-03-26T14:46:15.875-05:00"[CCyB? OMG, DC alphabet soup is now case-sen..."[CCyB? OMG, DC alphabet soup is now case-sensitive?]"<br /><br />Camel fonts have been around for a while: just ask "PwC"<br /><br />On the broader issue the Central banks should stop risking their long term independence for the sake of saving politicians from the short term consequences of bad choices. In the United States, the politicians who are most opposed to what the Fed has been doing are the same ones making the mistakes the Fed is trying to compensate for. The U.S. Fed should step back and let the politicians suffer the economic and political consequences of their policy choices. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-91072662749017725342016-03-26T09:49:51.311-05:002016-03-26T09:49:51.311-05:00There is actually a way of enabling CBs to dish ou...There is actually a way of enabling CBs to dish out helicopter money WITHOUT their doing anything too political. That's to have them boost different sectors of the economy IN PROPORTION to those sectors existing budgets. E.g. CBs could split stimulus as between public and private sectors in proportion to the existing % of GDP that those two sectors take. And as to government departments, CBs could allot money in proportion to gov departments' existing budgets.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-56256473509146857052016-03-25T14:03:20.234-05:002016-03-25T14:03:20.234-05:00Perhaps the amount of discretion central banks are...Perhaps the amount of discretion central banks are allowed should be limited to the quality of their recent forecasts. This could be over say a rolling eight year window and provide a safeguard. <br /><br />In science, the best forecasts come from those with the best understanding and models. Bad forecasts and foresight suggest poor models and understanding. <br /><br />Even the Martingale assumption that tomorrow's value of a metric (eg GDP growth) will be the same as today's would have well outperformed the Fed and IMF forecasts. <br /><br />If we changed this, we might find our economy managed by humble students of economic history rather than armchair theorists. Anonymoushttps://www.blogger.com/profile/13105992433220508166noreply@blogger.com