In February 1999, the Bank of Japan announced that its call money rate would be zero “until deflationary concerns subside.” Other than a temporary shift in 2001 and 2006, deflationary concerns remain. How effective was monetary policy? That point has been partially answered by the introduction of QE over and over and over again. The zero lower bound is to [...]
The June FOMC meeting coincides with the quarterly update of the Federal Reserve’s modeled economic and policy projections. As usual, the economy forecasts have been cut for both 2016 and 2017. The upper bound for the “central tendency” of real GDP in 2016 was 3% in the modeled calculations made at the end of 2014, those that saw no fallout [...]
Walter W. Heller was said to have been an “educator of Presidents.” As an economist and Presidential advisor in the inner circles of DC, Heller worked with more candidates and officeholders than perhaps any other man. As he himself described, his influence went all the way back to Adlai Stevenson and kept on through Kennedy, Johnson, Carter, and Mondale. To [...]
Some legitimate scientists are legitimately worried about the spread of information. The lack of boundaries afforded by an open internet has left the world awash in it, and with no shortage of opinion. This is a good thing. However, there is a downside in that unfiltered and unrefined information as it can be used to mislead both the person wielding [...]
Ten days ago, it was reported that the Bank of Japan for the first time set aside reserves against expected losses should its massive portfolio of JGB’s finally move toward QQE success. The main part of all this “stimulus” has been the accumulation of primarily government bonds at massive premiums. If it were ever to actually work, then the Japanese [...]
So thoroughly destroyed is Japan’s economy that some of the numbers it produces are beyond comprehension, just staggering in any meaningful context. For example, Japan’s real GDP (SAAR) for Q1 2016 was ¥530 trillion (chained 2005). That compared to ¥447 trillion in Q1 1994. Over two decades and two additional years the Japanese economy has grown by a grand total [...]
Home construction estimates continue to suggest the same kinds of economic imbalances unchanged from last year. While construction of single family homes had been rising, that increase was not nearly as widespread and voluminous to indicate that the real estate market had been restored by full economic restoration (jobs, jobs, jobs). Apartment construction, on the other hand, has been scaled [...]
The US Treasury yield curve is flattening again, with parts finally in 2016 surpassing the bearishness exhibited to start 2015. The mainstream is just now starting to notice likely because unlike last year there are no longer credible excuses to simply wish it away. “Transitory” is not a word you find much anymore, replaced instead by reluctant and forced acknowledgement [...]
What if the FOMC and the wider Federal Reserve apparatus had heeded Greenspan’s uncertainty? There is grave danger in wandering too far into counterfactuals, but there is some value, I think, in the exercise in this context. What we are really talking about is time, and it is time that is most relevant today as the greatest economic cost. This [...]
Because industrial production for the Eurozone was estimated to have risen 2.4% in January, first quarter GDP was boosted to 0.6% (quarterly rate) as statisticians were expecting that European industry would at least hold up the rest of the quarter. While not figuring the same blistering pace, the GDP figure suggested at least the European economy holding on to that [...]
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