#bennett mccallum

[mamomvpy]

In a deflationary world at the ZLB we need 'competitive devaluations'

In a deflationary world at the ZLB we need ‘competitive devaluations’

Sunday we got some bad news, which many wrongly will see as good news – this is from Reuters: China and the United States on Sunday committed anew to refrain from competitive currency devaluations, and China said it would continue an orderly transition to a market-oriented exchange rate for the yuan CNY=CFXS. …Both countries said they would “refrain from competitive devaluations and not target…

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[mamomvpy]

Bank of Canada at the Zero Lower Bound: The Export Price Norm to the rescue

Bank of Canada at the Zero Lower Bound: The Export Price Norm to the rescue

The continued drop in the oil prices have caused the Bank of Canada to reconsider whether it should cut it key policy rate – the Overnight rate – and in a speech earlier this week BoC governor Stephen Poloz said that he would not rule out negative interest rates in Canada even though he did not expect it and he also voiced some worries about negative rates in general. I overall think it is…

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[mamomvpy]

Time for the Fed to introduce a forward-looking McCallum rule

Time for the Fed to introduce a forward-looking McCallum rule

Earlier this week Boston Fed chief Eric Rosengreen in an interview on CNBC said that the Federal Reserve could introduce a forth round of quantitative easing – QE4 – since the beginning of the crisis in 2008 if the outlook for the US economy worsens.

I have quite mixed emotions about Rosengreen’s comments. I would of course welcome an increase in money base growth – what the Fed and others like…

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[mamomvpy]

Riksbanken moves close to the ZLB - Now it is time to give Bennett McCallum a call

Riksbanken moves close to the ZLB – Now it is time to give Bennett McCallum a call

In a very surprising move the Swedish Riksbank this morning cut its key policy rate by 50bp to 0.25%. It was about time! The Riksbank has for a very long time undershot its 2% inflation target and inflation expectations have consistently been below 2% for a long time as well.

The interesting question now is what is next? The Riksbank is now very close to the Zero Lower Boundand with inflation…

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