It´s not quite gone, but the just released NGDP growth data clearly indicates that monetary policy has, if anything, been tightening. The chart shows that NGDP growth at annual rates has been trending down for a year, and this does not consider that the level of nominal spending is way below any reasonable trend level.
Will this fact put some pressure for action during the upcoming FOMC meeting? Will the inflation hawks come to their senses and finally see that instead of going up inflation is coming down? Will the “fence sitters” conclude that the data is already very bad and that there´s no sense in “waiting for additional data”?
I have no idea, but given the history of the last three years, I´m not optimistic.
Thank you for the graph. I don’t expect any big things like NGDPLT, but perhaps they will at least take some steps toward a better outcome than this insanity. I don’t know how they sleep at night.
Gloom, doom and ruin.
Let us hope that inflation hawks are just secretly Obama-haters, and when (and if) Romney wins, they will start pushing for growth. I can detect no sensible reason for the hysteria about inflation now.
That is so depressing. We did not get out of the goldzone Great Depression until the grip of the golden fetters central banks was broken. Perhaps we will not get out of the eurozone Great Recession until the same happens. After all, there are so many similarities, as I discuss here:
http://skepticlawyer.com.au/2012/07/30/broken-by-the-fix/
From what I gather, NGDP growth has been adjusted upwards for 2009, but downwards in 2010. So the timing of the second NGDP shock was later, which explains delayed labor market adjustment better.
You should start a pool….
(Is there one already on Intrade – must go check…)
We need to start getting out more.
As best I can tell, Intrade doesn’t have a prediction market for anything to do with monetary policy. (They tried to set one up for the possibility of Ben Bernanke leaving the Fed, but no one bet).
Iowa seems to have a market only for the Federal Funds rate.
Prospectus: Federal Reserve Monetary Policy Winner-Takes-All Market B
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Came across this paper from 2002 in my travels…. Forecasting Inflation via Electronic Markets: Results from a Prototype Experiment
Michael Berlemann∗ & Forrest Nelson
Hope this link works:
Prospectus: Federal Reserve Monetary Policy Winner-Takes-All Market B
Looks like the world is figuring out what you knew a year and a half ago about Poland:
http://www.slate.com/blogs/moneybox/2012/08/01/poland_s_currency_devaluation_is_evidence_that_monetary_expansion_works.html
http://www.theatlantic.com/business/archive/2012/07/mitt-romneys-big-polish-idea-lets-debase-the-dollar/260550/
http://www.ryanlouiscooper.com/2012/08/why-are-small-countries-better-at.html
http://krugman.blogs.nytimes.com/2012/08/01/poles-apart-2/