If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(CNN)   Economists yelling for Yellen   (money.cnn.com) divider line 40
    More: Interesting, Janet Yellen, Federal Reserve, Moody's Analytics, Treasury Secretary Larry Summers, economists, Mark Zandi  
•       •       •

1662 clicks; posted to Business » on 06 Aug 2013 at 9:54 AM (36 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



40 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
2013-08-06 10:04:48 AM
I'd rather run my fingernails down a real chalkboard than listen to Janet Yellen speak.  Enough with the baby talk.
 
2013-08-06 10:08:39 AM
I get the impression Sanders is a much better politician than Yellen, and probably a worse economist.

As for speech, Yellen's voice doesn't bother me all that much. Now, if they were putting Neda Ulaby up for Fed chair, that's a different story.
 
2013-08-06 10:31:29 AM
Yellen's a done deal, Obama's just against her so that right wingers can have cover to support her.
 
2013-08-06 11:23:11 AM
It's important that the candidate maintain the big bank gravy train at the expense of everybody else.
 
2013-08-06 11:30:21 AM
Jessica Yellin is farking hawt.
 
2013-08-06 11:33:27 AM

HotIgneous Intruder: Jessica Yellin is farking hawt for a politican.

 
2013-08-06 11:44:07 AM
I'm Yellin' for Magellan.

//hated that ad campaign
 
2013-08-06 12:19:39 PM
That's 'cause they're not gelin'
 
2013-08-06 12:26:39 PM
To use anybody involved with the fustercluck that is the Fed of today is insanity.  It's going to be the same shiat, different day.
 
2013-08-06 12:37:26 PM
How does 4 out of 21 who support Summers become "virtually none"?
 
2013-08-06 12:49:35 PM
The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?
 
2013-08-06 12:54:54 PM
Summers still hasn't admitted he was wrong about the instability of all the "financial innovation" leading up to 2007.
http://www.kc.frb.org/publicat/sympos/2005/PDF/GD5_2005.pdf

Atomic Spunk: How does 4 out of 21 who support Summers become "virtually none"?


The article said only two supported Summers, and one of those was Lawrence Yun of the NAR, who sould probably count as -5 votes.
 
2013-08-06 01:00:54 PM
FTFA:Two respondents -- Sean Snaith of the University of Central Florida and Sung Won Sohn of Cal State University Channel Islands -- said they would prefer to convince Ben Bernanke to come back for a third term.

Not really the cream of the crop as far as economists go.
 
2013-08-06 01:14:38 PM

Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?


A lot of people think it pretty much is under normal circumstances. The 'Taylor rule' (http://en.wikipedia.org/wiki/Taylor_rule) is a formula where the central bank sets an interest rate based on targets for growth and inflation, with weights on each for their relative importance. For political reasons, the fed will never admit to following a Taylor rule, but a lot of analysts think that, particularly under Volcker, they did use it in practice. I've heard arguments that Greenspan made the housing bubble worse by keeping credit loose in the 2000s, even though the rule would suggest he could have tightened it. A lot of countries go even simpler than the Taylor rule, with just an explicit inflation target and more or less automatic changes in monetary policy to try to hit the target.
Where algorithms break down is when something extreme happens, like the recession in 07. The problem with big recessions is that the real interest rate bottoms out at about -1% (0.125% nominal interest minus about 1% inflation), so conventional monetary policy kind of runs out of power past a certain point and you need to do things like QE and all the assorted ways in which the Fed intervened to keep markets from locking up completely (which are seriously complicated and need to be developed case by case for each different crisis). The Fed's like a car: 95% of the time a computer could run it as well as, or arguably better than, humans. But the 5% of the time when something unexpected happens and the usual routines break down, you need a person at the wheel who can adapt and improvise. That's why people who can handle an economic crisis well, like Bernanke or Mark Carney here in Canada, are so valuable. The Brits offered Carney a 7 figure salary to poach him over to England and fix all their shiat. Economics is a soft science, and expert judgement seems to trump formulas most of the time.
 
2013-08-06 01:28:48 PM

Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?


It supposedly has some regulatory functions too, which should be run by humans ([sarcasm]great job so far, Benny [/sarcasm]) but the FOMC should pretty much be a trading algorithm.  Maybe somebody puts in an inflation target or an unemployment target or something, and make that the only input.
 
2013-08-06 01:31:11 PM

Smeggy Smurf: To use anybody involved with the fustercluck that is the Fed of today is insanity.  It's going to be the same shiat, different day.


Pretty clever plan, huh?
 
2013-08-06 02:17:39 PM

Smeggy Smurf: To use anybody involved with the fustercluck that is the Fed of today is insanity.  It's going to be the same shiat, different day.


I know. It'd be really nice if they could get some people who will actually get the economy moving instead of allowing above-target unemployment when there's below-target inflation. Instead they'll be "hurr durr, let's talk about tightening even though nothing on the horizon suggests it's needed or even useful."

/sigh
 
2013-08-06 02:19:57 PM

Incontinent_dog_and_monkey_rodeo: Yellen's a done deal, Obama's just against her so that right wingers can have cover to support her.


Huh. Wouldn't it be nice if he could pull off that kind of political judo.

I doubt the RWers will be satisfied with anything less than a full-on goldbug though.
 
2013-08-06 02:27:24 PM

Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?


The ideal dumb algorithm, from what I read, would be NGDP targeting. Basically the Fed saying "the US economy, measured in dollars, WILL grow at (e.g.) 2% per year." If they were committed to that, it would make lots of problems go away - coordination, inflation expectations, possibly even the Zero Lower Bound. And it should be within their power (never bet against the printing press).

How much of that 2%/year goes into real growth vs. inflation is entirely up to other factors: fiscal policy, markets, etc.

Though if you had to tweak the growth rate because the economy "wanted" to grow faster than 2% real and holding it back was causing too much unemployment, we might be right back where we started with a Taylor-rule dual mandate.

/My favorite Occupy protest sign: "F*** Opportunistic Disinflation - it's a DUAL mandate"
 
2013-08-06 02:47:47 PM
Fed doesn't control the market anymore. Doesn't matter who runs it.
 
jvl
2013-08-06 02:49:18 PM

Smeggy Smurf: To use anybody involved with the fustercluck that is the Fed of today is insanity.  It's going to be the same shiat, different day.


Yellen is the best hope for those of us who believe the Fed is a clusterfark.

Summers would be the nightmare. More of the same idiocy.
 
2013-08-06 03:11:31 PM

Gaseous Anomaly: The ideal dumb algorithm, from what I read, would be NGDP targeting. Basically the Fed saying "the US economy, measured in dollars, WILL grow at (e.g.) 2% per year." If they were committed to that, it would make lots of problems go away - coordination, inflation expectations, possibly even the Zero Lower Bound. And it should be within their power (never bet against the printing press).

How much of that 2%/year goes into real growth vs. inflation is entirely up to other factors: fiscal policy, markets, etc.

Though if you had to tweak the growth rate because the economy "wanted" to grow faster than 2% real and holding it back was causing too much unemployment, we might be right back where we started with a Taylor-rule dual mandate.


That doesn't sound like a very good idea. It doesn't solve the inflation expectations problem at all. The price level is fully capable of moving with or against the rate of economic growth, for example in the case of stagflation. Your algorithm would make the price level just as hard as the business cycle to predict, since any time the growth rate changed, inflation would do the opposite. CPI inflation in the US has been between 1.6% and 4.1% in all but two of the last 30 years (it was 4.8% once and -0.4% once). GDP growth, on the other hand, has been anywhere between 7.2% and -3.5%. So, relative to today, inflation uncertainty would be huge.
 
2013-08-06 03:14:45 PM

neon_god: That doesn't sound like a very good idea. It doesn't solve the inflation expectations problem at all. The price level is fully capable of moving with or against the rate of economic growth, for example in the case of stagflation. Your algorithm would make the price level just as hard as the business cycle to predict, since any time the growth rate changed, inflation would do the opposite. CPI inflation in the US has been between 1.6% and 4.1% in all but two fourof the last 30 years (it was 4.8% once, 4.2% once, 5.4% once and -0.4% once). GDP growth, on the other hand, has been anywhere between 7.2% and -3.5%. So, relative to today, inflation uncertainty would be huge.


Misread the chart a bit, but my point stands. US inflation has been far steadier than GDP growth
 
2013-08-06 03:18:39 PM
Baby Boomer consumerism is going extinct, so it doesn't matter how much money they print. No one is buying shiat.
 
2013-08-06 03:36:34 PM

neon_god: Misread the chart a bit, but my point stands. US inflation has been far steadier than GDP growth


Especially when you fudge with the numbers that make up the inflation calculation.
 
2013-08-06 03:43:16 PM
god, people think you can 'control the economy' with a computer.

If it wasn't for the pain it would cause hundreds of millions of people, I'd love to see it implemented for the laughs.
 
2013-08-06 03:54:40 PM

MugzyBrown: neon_god: Misread the chart a bit, but my point stands. US inflation has been far steadier than GDP growth

Especially when you fudge with the numbers that make up the inflation calculation.


In what way are the numbers fudged? Do you mean the fact that the Fed excludes food and fuel? Because I got my numbers above from the BLS, which counts both those things in its headline CPI. Or do you mean the numbers are outright fraudulent? The best independent numbers I can find are from MIT's billion prices project, which accord pretty well with CPI for the limited time period available (mostly since the recession). If anything they're smoother, which strengthens my case.  http://bpp.mit.edu/usa/.
 
2013-08-06 03:57:04 PM

neon_god: In what way are the numbers fudged? Do you mean the fact that the Fed excludes food and fuel? Because I got my numbers above from the BLS, which counts both those things in its headline CPI.

Fed CPI doesn't include food and fuel. You're the only person looking at BLS numbers.

 
2013-08-06 04:01:47 PM

neon_god: In what way are the numbers fudged?


The calculation was changed in the 90's to reduce the COLA for gov't beneficiaries.
 
2013-08-06 04:19:55 PM

BurrisYeltsin: Fed CPI doesn't include food and fuel. You're the only person looking at BLS numbers.


I know that, but it's irrelevant to my argument. There are good reasons for excluding food and fuel from the inflation calculation used in monetary policy. Both are volatile and determined by factors largely outside the US economy. You don't want to over-react to swings in the oil price that have little if anything to do with US monetary policy. The BLS number is more volatile, which is why I used it, and it's  still less volatile than GDP. That's my point

MugzyBrown: The calculation was changed in the 90's to reduce the COLA for gov't beneficiaries.


You mean the Boskin Commission? They made some technical recommendations that mostly revolve around the fact that advancing technology changes consumption patterns and quality of life, which had a pretty mild impact on the estimated rate of inflation. Their ideas were pretty good overall, with some flaws, and were largely accepted by economists. I don't really see the issue.
 
2013-08-06 04:45:29 PM
Economists should focus more on sociology and less on statistics.
 
2013-08-06 04:52:36 PM

neon_god: Gaseous Anomaly: The ideal dumb algorithm, from what I read, would be NGDP targeting. Basically the Fed saying "the US economy, measured in dollars, WILL grow at (e.g.) 2% per year." If they were committed to that, it would make lots of problems go away - coordination, inflation expectations, possibly even the Zero Lower Bound. And it should be within their power (never bet against the printing press).

How much of that 2%/year goes into real growth vs. inflation is entirely up to other factors: fiscal policy, markets, etc.

Though if you had to tweak the growth rate because the economy "wanted" to grow faster than 2% real and holding it back was causing too much unemployment, we might be right back where we started with a Taylor-rule dual mandate.

That doesn't sound like a very good idea. It doesn't solve the inflation expectations problem at all. The price level is fully capable of moving with or against the rate of economic growth, for example in the case of stagflation. Your algorithm would make the price level just as hard as the business cycle to predict, since any time the growth rate changed, inflation would do the opposite. CPI inflation in the US has been between 1.6% and 4.1% in all but two of the last 30 years (it was 4.8% once and -0.4% once). GDP growth, on the other hand, has been anywhere between 7.2% and -3.5%. So, relative to today, inflation uncertainty would be huge.


Hadn't thought of the inflation uncertainty, thanks.
 
jvl
2013-08-06 05:48:24 PM

BurrisYeltsin: Economists should focus more on sociology and less on statistics.


Not sure if serious... or just unaware that good sociology produces statistics.
 
2013-08-06 06:24:18 PM

neon_god: Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?

A lot of people think it pretty much is under normal circumstances. The 'Taylor rule' (http://en.wikipedia.org/wiki/Taylor_rule) is a formula where the central bank sets an interest rate based on targets for growth and inflation, with weights on each for their relative importance. For political reasons, the fed will never admit to following a Taylor rule, but a lot of analysts think that, particularly under Volcker, they did use it in practice. I've heard arguments that Greenspan made the housing bubble worse by keeping credit loose in the 2000s, even though the rule would suggest he could have tightened it. A lot of countries go even simpler than the Taylor rule, with just an explicit inflation target and more or less automatic changes in monetary policy to try to hit the target.
Where algorithms break down is when something extreme happens, like the recession in 07. The problem with big recessions is that the real interest rate bottoms out at about -1% (0.125% nominal interest minus about 1% inflation), so conventional monetary policy kind of runs out of power past a certain point and you need to do things like QE and all the assorted ways in which the Fed intervened to keep markets from locking up completely (which are seriously complicated and need to be developed case by case for each different crisis). The Fed's like a car: 95% of the time a computer could run it as well as, or arguably better than, humans. But the 5% of the time when something unexpected happens and the usual routines break down, you need a person at the wheel who can adapt and improvise. That's why people who can handle an economic crisis well, like Bernanke or Mark Carney here in Canada, are so valuable. The Brits offered Carney a 7 figure salary to poach him over to England and fix ...


b.pcc2.fubar.com
 
2013-08-06 06:55:14 PM

Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?

 
2013-08-06 09:36:18 PM
Let us survey 100 women to see if the women support the woman. Crack reporting as always CNN.

/sick of the "we're women, we're oppressed, glass ceiling, we have babies" crap.
//heard enough of it in college with female professors...even in classes that had nothing to do with the subject
 
2013-08-06 09:42:37 PM
So, let's see here...Obama decides on

1. Summers, because he's the guy he knows and known by others he knows.
2. Yellen, because he doesn't know her but actually changes his mind because of others' advice.
3. Yellen, but claims it's Summers to provide her a decoy from the GOP.

So many decisions...
 
2013-08-06 11:40:47 PM

BurrisYeltsin: Economists should focus more on sociology and less on statistics.


FOR THE LOVE OF GOD THANK YOU.
 
2013-08-07 01:20:34 AM

neon_god: Lost Thought 00: The operation of the Fed is pretty much determined automatically by their mandate as compared against leading economic indicators. Is there any reason not to simply have it run by an algorithm?

A lot of people think it pretty much is under normal circumstances. The 'Taylor rule' (http://en.wikipedia.org/wiki/Taylor_rule) is a formula where the central bank sets an interest rate based on targets for growth and inflation, with weights on each for their relative importance. For political reasons, the fed will never admit to following a Taylor rule, but a lot of analysts think that, particularly under Volcker, they did use it in practice. I've heard arguments that Greenspan made the housing bubble worse by keeping credit loose in the 2000s, even though the rule would suggest he could have tightened it. A lot of countries go even simpler than the Taylor rule, with just an explicit inflation target and more or less automatic changes in monetary policy to try to hit the target.
Where algorithms break down is when something extreme happens, like the recession in 07. The problem with big recessions is that the real interest rate bottoms out at about -1% (0.125% nominal interest minus about 1% inflation), so conventional monetary policy kind of runs out of power past a certain point and you need to do things like QE and all the assorted ways in which the Fed intervened to keep markets from locking up completely (which are seriously complicated and need to be developed case by case for each different crisis). The Fed's like a car: 95% of the time a computer could run it as well as, or arguably better than, humans. But the 5% of the time when something unexpected happens and the usual routines break down, you need a person at the wheel who can adapt and improvise. That's why people who can handle an economic crisis well, like Bernanke or Mark Carney here in Canada, are so valuable. The Brits offered Carney a 7 figure salary to poach him over to England and fix ...


Look at all the insanely complex schmoozing we have to do to make sure it's profitable for banks to lend money to the plebs. Shut the whole corrupt mess down. Not an ounce of it is based on real economic conditions that takes into account supply chains, real growth in markets that isn't cannabalizing other markets, or the rate technology is increasing efficiency. It's merely a complex way to best increase wealth inequality.
 
2013-08-07 09:53:10 AM
She would be great. Any criticism of the fed could be labeled misogyny for months.
 
Displayed 40 of 40 comments

View Voting Results: Smartest and Funniest


This thread is closed to new comments.

Continue Farking
Submit a Link »






Report