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Tag Archives: inflation

Money Printer Go Brrr … And No Inflation? — Brian Romanchuk

Although a big fiscal package is in the pipeline (admittedly the Greatest Deliberative Body in the World is playing its usual log-rolling games), smashed supply, and rampant "money printing" (ha!), breakeven inflation in the United States is cratering (figure above). This is exactly what should have happened, although the big question is whether current pricing is an overshoot of fundamentals. (I leave that market call to the reader.) I outline why this puzzling inflation perspective is the...

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Inflation Is NOT The Most Significant Factor Determining Bond Prices — Brian Romanchuk

One of the pieces of pseudo-science that floats around in popular discussion of bonds is the belief that bond investors are deadly afraid of inflation. In particular, bonds "lose money" every time the Consumer Price Index rises -- which is most months, in most developed countries. As far as I can tell, this is the legacy of some Economics 101 textbook story that has been passed on from "expert" to "expert" over the decades. The correct answer is that nominal yields largely reflect the...

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MMT And Price Level Determination — Brian Romanchuk

What determines the price level is a theoretical topic that pops up in Mosler's White Paper on Modern Monetary Theory (MMT - link to my discussion). Mosler's argument is that only MMT provides a proper understanding of price level determination. That is a strong claim, and difficult to assess. However, the discussion of price level determination is a distinctive part of MMT, and should receive greater prominence in discussion.... Bond Economics MMT And Price Level DeterminationBrian...

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Interview with Asahi Shimbun in Tokyo – November 6, 2019

During my recent trip to Japan, where I made several presentations to various groups, including a large gathering in the Japanese Diet (Parliament), I received a lot of press interest, which is a good sign. I am slowly putting together the translated versions of some of the print media articles. Today, I provide a translation (with my annotations) of an interview I did with the centre-left newspaper – Asahi Shimbun – on November 6, 2019 in Tokyo. This is a daily newspaper and is...

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Ten things to know about the 2019-20 Alberta budget

I’ve just written a ‘top 10’ overview of the recent Alberta budget. Points raised in the post include the following: -The budget lays out a four-year strategy of spending cuts, letting population growth and inflation do much of the heavy lifting. -After one accounts for both population growth and inflation, annual provincial spending in Alberta by 2022 is projected to be 16.2% lower than it was last year. -Alberta remains Canada’s lowest-taxed province. It also...

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This jobs report is a game-changer regarding monetary policy. Here’s why

It’s been a while since I had a public post on Credit Writedowns. So I thought now would be a good time to post given Wednesday’s Fed rate decision and presser and today’s jobs report. I think this one-two punch is a big deal. And that’s because it forces the market back to a focus on the Fed’s tightening bias from its focus on weak data forcing the Federal Reserve to cut. Thoughts below The narrative Before I get to the data, let me spell out how to think about the market and the...

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Ten things to know about poverty measurement in Canada

I’ve written a blog post providing an overview of poverty measurement in Canada. Points raised in the post include the following: -One’s choice of poverty measure has a major impact on whether poverty is seen to be increasing or decreasing over time. -Canada’s federal government recently chose the make the Market Basket Measure (MBM) its official poverty measure. -According to the MBM, Canada has seen a major decrease in poverty over the past decade. -Also...

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When old central bankers know what is wrong but can’t bring themselves to saying what is right

Last Friday (October 4, 2019), a group of former central bank governors and/or officials in Europe, issued a statement damming the conduct of the European Central Bank. You can read the full text at Bloomberg – Memorandum on ECB Monetary Policy by Issing, Stark, Schlesinger. The timing of the intervention is interesting given the change of boss at the ECB is imminent. As I explain in what follows, the Memorandum should be disregarded. Its central contentions are mostly correct but the...

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