Thursday, March 21, 2019
Since I do not do market forecasting, my comments on the actual state of bond markets have been sporadic. I just want to refresh my views, particularly since I have had a recent increase in readership. Although writing a book on recessions obviously skews my thinking, my argument is straightforward: the U.S. Treasury curve is priced so that the next big move is down, and the likely trigger for cuts would be a recession. That recession need not be imminent; if we look at the 10-year (as above), it just has to hit in the next 9 years or so.
Wednesday, March 20, 2019
Sunday, March 17, 2019
Update 2017-03-18 I finally tracked down an article that is useful for my purposes (one day after publishing this, of course). This working paper from Bank of England researchers acts an exception to some of my comments on the state of the literature. At present, I do not think I need to retract many comments (although a speculative one was heavily qualified), as I noted multiple times that I was basing my comments on the literature I examined. That said, the article conforms to my description of the "reaction function interpretation" (explained within the text). There is a technical update added below with further details.
Wednesday, March 13, 2019
Sunday, March 10, 2019
The text Macroeconomics by William Mitchell, L. Randall Wray, and Martin Watts is now available as a pre-order for the paperback edition (the ebook edition may already be available; I have not had time to validate). As anyone who has been paying any attention for the past few weeks, Modern Monetary Theory (MMT) has been the subject of controversy. Although I am certainly biased, roughly 99% of the recent high profile attacks are just attacking straw men; one needs to actually read some of the actual theory to critique it. Although there are tons of free primers and so forth on the internet, for many people, their time is worth more than the cost of the textbook. It is my understanding that this textbook will be advanced enough to cover the topics that are beyond the internet primers, and it will provide references to the literature if one wants to purse the primary literature.