The New MM Boys are attempting to aim for the fences, and develop a new economic school of thought that will cause the economy to prosper through stabilizaton of Nominal GDP. But so far they are just hitting singles and doubles. Before I continue, here are a list of terms that apply to the New MM bloggers:
Terms Market Monetarists are most interested in. Google them if you are not familiar with them:
- Phillips Curve broken down
- Nominal GDP (NGDP)
- NGDP Targeting and Inflation Targeting
- ZIRP and NIRP
- Money Illusion
- Rational Expectations
- NGDP Futures
- Nominal Income Target
- Monetary Disequilibrium Theory
- Sticky Wages/Sticky Prices
- Hot Potato Effect
- Wicksellian Dilemma
- Wicksellian Natural Rate of Interest
- Keynesian Liquidity Trap
- Interest on Reserves (IOR)
- Aggregate Demand Determined by Future Path of NGDP
- Base Money
- Excess Reserve Interest As a Monetary Tool
- Velocity of Money
- Decline of M1 Money Multiplier
- PT or PY?
Turns out, the demand for bonds I have written about here at Talkmarkets could be preventing GDP targeting as the Fed only seems to want to buy bonds or MBSs and can’t hoard long bonds forever, which are in great demand. The Fed doesn’t seem to want to buy shopping centers (although it was stuck with one), or, gold or stocks or other assets like land to use as collateral, at this point. Some market monetarists want the Fed to branch out for collateral.
One problem is that market monetarists expect bond yields to rise when the Fed purchases those assets. But that may not be proven true.
Now, when I was a young child, around 12 years old, my father took me to watch the original MM Boys from the New York Yankees. It was at the old Wrigley Field in Los Angeles, first home of the California Angels baseball team.
Wrigley Field had a ramp where players walked to the field. I managed to see the real MM Boys up close, a childhood dream. There stood Mickey Mantle and Roger Maris, and I got Mickey Mantle’s autograph that day. Maris watched, smoking a cigarette. Can you imagine if those guys had taken care of themselves?
