Joe Queenan on core inflation

In a very entertaining piece in this weekend’s Wall Street Journal, Joe Queenen gripes about how economists measure inflation. He starts by lamenting the high cost of everything from gas, to bagels, to coffee.  “You can imagine my surprise,” he continues, “when the latest economic data came out and we were told that inflation wasn’t … Read more

Changing the rules at the FOMC

Representative Barney Frank (D-MA) has introduced a measure that would change the membership of the Federal Open Market Committee (FOMC), the group within the Federal Reserve that sets short-term interest rates by intervening in the federal funds market. The FOMC currently consists of the seven members of the Board of Governors of the Federal Reserve … Read more

Don’t change the Fed’s mandate

Writing in the Financial Times, Stephen Roach concludes that it is “[t]ime to revamp the Fed’s flawed mandate.” Roach argues that maintaining financial stability should be added to the Fed’s current dual mandate of maximum employment and price stability.  Such a change would be ineffective at best, destructive at worst. It would be ineffective because … Read more