Whew. The penultimate draft of The Fiscal Theory of the Price Level is now done, and in the hands of the copy-editors at Princeton. There is still time to send me typos, thinkos, wrong equations, excessive repetition and more!

Don't really have much to add, congrats John. Your FTPL work generated a lot of interesting discussion in my circle, and it might well be the book that launches a thousand research careers (well, at least a few).

Best wishes, and look forward to an updated Asset Pricing manuscript ;).

Thanks. It keeps evolving. And comments are always welcome. It's being copy edited; then I make final fixes. Then, inevitably, when it is published people will find all sorts of problems, and at the rate things are going I will understand half the issues differently, so we start work on the second edition!

I haven't read and don't know this literature but I'm sure this will be a compelling introduction, overview, and framework. Like "Asset Pricing" another tour de force. Don't know how you do it...

I've downloaded and will read. I might need to take some remedial math classes because I forgot what I used to know. Ha. Anyway, so far, lots of good gems. I've got my highlighters and tabs ready.

Just from a scholastically centered point of view, what makes the three theories of inflation from the intro classical? Obviously the gold backing theory of money goes back to the classics but didn’t die off til the 70s, the quantity theory has roots in classical theory but really takes off post great depression, but is the interest rate targeting system classical? Ive been thinking instead of trying to apply the eras of “clasical/modern/postmodern” to macro theory. In which case I might have called all three modern, with the backing and quantity theories being classical to modern and interest rate theories modern to post modern. It strikes me that the FTPL has depper roots in the classics than new keynesian theories but using the post modern tool kit.

2.3 is a lot to chew on. Maybe a but nit-picky but I don’t think it is very intuitive for people to understand Mt=0. So a couple of the lines in there are a bit mysterious.

“ first place because money demand (zero),” would rather it was clearer why zero is in the parenthetical. (Mt=0) or have it in words. To be fair you make it clearer later.

“If you’re bothered by negative money in the opposite direction,” That took me a while to understand what negative money in some opposite direction meant.

“bond soak up” i think a typo right after the equation. Should be “bonds”.

Comments are welcome. Keep it short, polite, and on topic.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.

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ReplyDeleteICYMI, the Economist referenced John's upcoming magnum opus in this weekend's article "Has the pandemic shown inflation to be a fiscal phenomenon?"

ReplyDeleteDon't really have much to add, congrats John. Your FTPL work generated a lot of interesting discussion in my circle, and it might well be the book that launches a thousand research careers (well, at least a few).

ReplyDeleteBest wishes, and look forward to an updated Asset Pricing manuscript ;).

I read a draft of the book back in 2018. I am curious to see how it evolved.

ReplyDeleteI will read it again, and send comments if in time. Professor: do you have a "deadline" for us? Livio

Thanks. It keeps evolving. And comments are always welcome. It's being copy edited; then I make final fixes. Then, inevitably, when it is published people will find all sorts of problems, and at the rate things are going I will understand half the issues differently, so we start work on the second edition!

DeleteI haven't read and don't know this literature but I'm sure this will be a compelling introduction, overview, and framework. Like "Asset Pricing" another tour de force. Don't know how you do it...

ReplyDeleteI've downloaded and will read. I might need to take some remedial math classes because I forgot what I used to know. Ha. Anyway, so far, lots of good gems. I've got my highlighters and tabs ready.

ReplyDeleteJust from a scholastically centered point of view, what makes the three theories of inflation from the intro classical? Obviously the gold backing theory of money goes back to the classics but didn’t die off til the 70s, the quantity theory has roots in classical theory but really takes off post great depression, but is the interest rate targeting system classical? Ive been thinking instead of trying to apply the eras of “clasical/modern/postmodern” to macro theory. In which case I might have called all three modern, with the backing and quantity theories being classical to modern and interest rate theories modern to post modern. It strikes me that the FTPL has depper roots in the classics than new keynesian theories but using the post modern tool kit.

ReplyDeleteWell, truth to tell, this book looks over my head.

ReplyDeleteIs there a section that deals with the consequences, negative or positive, of a national central bank building up and holding a large balance sheet?

I would try to understand such a section of the book.

“to pay them off in real terms, so so on.” I think should be “and so on”

ReplyDelete2.3 is a lot to chew on. Maybe a but nit-picky but I don’t think it is very intuitive for people to understand Mt=0. So a couple of the lines in there are a bit mysterious.

ReplyDelete“ first place because money demand (zero),” would rather it was clearer why zero is in the parenthetical. (Mt=0) or have it in words. To be fair you make it clearer later.

“If you’re bothered by negative money in the opposite direction,” That took me a while to understand what negative money in some opposite direction meant.

“bond soak up” i think a typo right after the equation. Should be “bonds”.

“we need to specify that fiscal policy allow p∗t to declines” should be”…allows…to decline”

ReplyDeleteThanks. All noted and ready to be fixed...

Delete“that allowed it to borrow when it later needed to so so.” Probably “…to do so.”

Delete“It is useful identity” missing an article. Also in the Table of Contents section 3 appears to be missing a space in “IIIMonetary”

ReplyDelete“ the combination of low real interest rates and short-term financing mean…” Possibly “the combination…means” but it may sound awkward that way.

ReplyDelete“ One might even accept (fail to reject) a view that the debt-to-GDP ratio as a greater than unit root. ” maybe “has a greater than unit root”?

ReplyDelete