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MoneyChurch60 karma

Hi Prof. Sumner! Thanks for taking the time to do this AMA--you have some big fans around these parts.

  1. /u/Integralds tells me you spent a decade reading each day's Wall Street Journal and New York Times from the 1930s in order to understand the Depression as people experienced it. What's your favorite article or op-ed from that time?

  2. Do approaches like the Cleveland Fed's inflation expectations, which attempt to account for determinants of breakeven inflation other than expected inflation (i.e. risk and liquidity premia), give us better or worse information about expectations than the raw TIPS spread?

  3. A group of prominent economists (e.g. Hansen, Lucas, Prescott) recently published a statement endorsing an instrument rule for the Fed. In particular, they support legislation that would require the Fed to detail a policy rule (not necessarily a Taylor-style rule) and explain their reasoning whenever they choose to deviate from it. Would this be better or worse than the current state of affairs?

MoneyChurch8 karma

So, what did cause the Great Depression.

Bad monetary policy. See Friedman and Schwartz, A Monetary History of the United States, 1867-1960, (1963).

And, what got us out of it?

Less bad monetary policy. See Romer, "What Ended the Great Depression?", Journal of Economic History, (1992).

MoneyChurch7 karma

skulks away drinking grapefruit juice with pulp

MoneyChurch6 karma

For example does debt add money to the GDP

Stocks and flows, dude.

MoneyChurch3 karma

Models should be collections of paragraphs combined with lots of data and charts, not collections of equations.

So do you think Marshall's "burn the mathematics" approach is the right way to do economic analysis, or do you think we shouldn't have the mathematics in the first place?