Weekend Music & Links
Your links for this weekend:
- Roger Lowenstein has a fascinating profile of Ben Bernanke in The Atlantic. (HT: Tyler Cowen)
- The increase in inequality in the United States has little if anything to do with tax policy, Karl Smith says. Daron Acemoglu and James Robinson respond here.
- Scott Sumner makes an excellent point that monetary policy shouldn't be something you have to adjust to respond to nominal or real shocks. "If there is some sort of policy that you think needs fixing via monetary policy, then you have the wrong monetary policy regime. You are targeting the wrong variable," Sumner writes.
- "[T]he powerful relationship between inflation expectations and stock prices remains so strikingly evident suggests that further increases in expected inflation would help, not hurt, the economy," David Glasner writes, reaffirming what I've been saying for a while now: when the central bank hits the nominal zero lower bound, the appropriate monetary policy response is to raise inflation expectations. (HT: Mark Thoma)
- The remarkable rise in the price of oil in recent years is largely not explained by speculation, but by "changing economic fundamentals," i.e. rising global demand, according to a review of research. (HT: James Hamilton)