(more cosma) ..how about those 12 million identifiably different products

"It is conceivable that there is some alternative feedback mechanism which is as rich, adaptive, and easy to use as the market but is not the market, not even in a disguised form. Nobody has proposed such a thing.".

"today our system of markets  are about  the whims of the rich matter more than the needs of the poor; that it is more important to keep bond traders in strippers and cocaine than feed hungry children...because feeding them is a less”efficient” use of food than helping rich people eat more."

".... this sort of pathology is not intrinsic to market exchange; it comes from market exchange plus gross inequality. "


" we want to ensure not just that everyone has access to the market, but also that they have (roughly) comparable amounts of money to spend."

" a strong case can  be made for egalitarian distributions of resources as
 a complement to market allocation. "

"Planning is certainly possible within limited domains — at least if we can get good data to the planners — and those limits will expand as computing power grows. But planning is only possible within those domains because making money gives firms (or firm-like entities) an objective function which is both unambiguous and blinkered. "

"Planning for the whole economy would, under the most favorable possible assumptions, be intractable for the foreseeable future, and deciding on a plan runs into difficulties we have no idea how to solve.  "

"Planning is certainly possible within limited domains — at least if we can get good data to the planners — and those limits will expand as computing power grows. But planning is only possible within those domains because making money gives firms (or firm-like entities) an objective function which is both unambiguous and blinkered. Planning for the whole economy would, under the most favorable possible assumptions, be intractable for the foreseeable future, and deciding on a plan runs into difficulties we have no idea how to solve. "

by cosma

hey pk how we doin' ?

last thrree job recoveries were complted in two years
here we are well into year three ....



lets go to the chrissy table

.
PK:

" my estimate, the current number using industrial production data is 455;
it will get a bit bigger but not much if the recovery continues.
So we’re doing worse than after, say, the Panic of 1907 — but not that much worse."

rosengren top canine at the boston fed sez more monetary stimulus ...please my voting brothers and sisters

but rosey by what means ??

 op twist ? quant ease ?
jaw boning ?


   the problem here is failure to establish a plausible mechanism(s)
 among the 9 fold ways

the cash gift injection way is not availible

bad business loans ?

lower usury standards ?
how do you get your beloved for profit mediators
to orginate this explosion of bad lending ?

universal uncle guarantees ?

wealth effects ?

and how much buying would that take to increase corporate and household spending ON REAL PRODUCTS  not just other paper ?

no dear i'm not angry anymore ..

There never was a credibility problem markets will believe the fed could march us all right up to where we nominally oughta to be on the textrapolated NGDP trend line

scott thinks so

why don't most folks ?

because a naughty myth blinds us from the easy truth:

".....  the phony “credibility” issue."

"The claim is that Central  Banks  had to fight hard in the 1970s and early 1980s
to get markets to believe they were serious about inflation. "

"Fortunately, that is simply not true. "

"Markets have little difficulty figuring out what central banks are up to. "


"When the central bank wants to reduce inflation (as they did after 1981) markets believe them."

"  When they didn’t want to, markets didn’t believe they’d lower inflation. "

"There never was a credibility problem."

".. this myth was partly due to a misreading of the early Volcker years. "

"Volcker took over at the Fed in the fall of 1979, but it wasn’t until two years later that inflation started to fall significantly. But there shouldn’t be any big mystery as to why inflation didn’t fall earlier, money wasn’t tight earlier. For instance, in the spring of 1980 Volcker cut the fed funds rate from 17.6% to 9.0%, despite the fact that inflation in 1980 was over 13%, the highest in my entire lifetime. "

"Why would Volcker have done such a stupid thing? Why slash rates sharply (driving real rates far below zero) when inflation was running 13%? BECAUSE HE WASN’T FOCUSED ON INFLATION, HE WAS TARGETING REAL GDP. And we were sliding into recession in the first half of 1980....."

Market monetarians:. Scenario

"The Fed could do this by committing to buy up as many securities as needed to hit its target. .....................Unlike previous large-scale asset purchases by the Fed, this would be a conditional purchase tied to an explicit target................. ....... It therefore would be more effective in guiding market expectations and, in turn, less costly for the Fed. If Fed chairman Ben Bernanke announced that the Fed was going to act to bring nominal spending back to the pre-crisis trend, it would send shock waves through the markets. Portfolios would automatically adjust toward riskier assets in anticipation of the Fed action. ............ This would create expectations of higher asset prices, as would expectations of higher nominal-income growth......... As a result, the demand for money would fall and financial firms would start making more money assets.............. Current nominal spending would quickly respond to these developments, helping the Fed hit the target and thus reducing the need for the Fed to purchase more assets......... The Fed’s balance sheet, therefore, would not have to expand as rapidly as it has over the past few years......" ................. ............. The links here strike me as "venturesome" ...eh ??........................ If we choose 5 % as the trend level increase of ngdp We have this range: at one zero pole 5% inflation and at the other zero pole 5% output growth This becomes a sturdy inflation /deflation anchor if real output growth over long periods is fairly stable And predictable Inflation level targeting or output level targeting alone are both rejected " central banks adopted an explicit rule for the growth of nominal income, with the proviso that they would correct for short-term departures from the target, they could pocket the gains we have made in monetary practice while fixing some serious remaining flaws. The difficulty of using interest rates as an instrument at the zero bound, the inability to restabilize long-term expectations after a deviation, and the inappropriate responses to supply shocks would all cease to be problems. The Fed’s dual mandate would be obeyed, but its flexibility would be constrained by a rule and thus its behavior made predictable."