Yesterday, in my post "Fed's hidden strategy: Implementing new dual NGDP targets", I introduced a weekly NGDP growth proxy for the United States and proposed a medium-term NGDP target rule. Today, I want to push this analysis further by exploring how the US yield curve might be functioning as a policy instrument in the Federal…

Market Monetarist

16.07.2024

A Summer Surprise: A rather massive positive supply shock? | The Market Monetarist

Here are two sets of high-frequency US economic data: first, the daily US "inflation" numbers as measured by Truflation.com and the Weekly Economic Index (Lewis-Mertens-Stock), which is a very good weekly indicator of US real GDP growth. What are we seeing? Inflation is sharply down... ... and (proxy) real GDP growth is sharply up. This…

Market Monetarist

25.07.2024

How Well Do Large Language Models Reason About Macroeconomics? | The Market Monetarist

I think it is pretty clear to everybody who follows this blog and follows me on social media that I am deeply fascinated by AI and how we can use, for example, Large Language Models in economic research—and I am eager to spread the gospel. Today, I spent a couple of hours building a simple…

Market Monetarist

26.07.2024

Eeny, Meeny, Miny, Mankiw: The Surprisingly Accurate Way to Guess Fed Policy | The Market Monetarist

The Taylor rule is the celebrity of monetary policy rules, frequently touted as the go-to framework for central banks, especially the Federal Reserve. Its simplicity is its charm: set interest rates based on how far inflation deviates from the target and how much the economy is straying from its potential output. However, let's not kid…

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The Yield Curve as a Policy Instrument: Decoding the Fed’s Implicit NGDP Targeting for the US Economy | The Market Monetarist

A Summer Surprise: A rather massive positive supply shock? | The Market Monetarist

How Well Do Large Language Models Reason About Macroeconomics? | The Market Monetarist

Eeny, Meeny, Miny, Mankiw: The Surprisingly Accurate Way to Guess Fed Policy | The Market Monetarist

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