International macroeconomist at the Peterson Institute for International Economics. Formerly worked at the Federal Reserve Board and US Treasury.
Feb 18, 2022 • 4 tweets • 2 min read
In an excellent article about the pandemic, @paulkrugman makes a small point that may mislead some readers. He calls into question the idea that an overheating economy is responsible for inflation. 1/n
The evidence he cites is that real GDP is not above the prepandemic trend. But this is not a requirement for overheating. The economy has been hit by 2 shocks: a demand shock that a few of us saw coming and a supply shock that nobody saw coming. 2/n
Feb 18, 2022 • 4 tweets • 1 min read
I think the Fed will succeed in fighting inflation without causing a recession. It is probably a bit too optimistic about how fast inflation will fall or how much it needs to tighten, but not by a lot. barrons.com/articles/reces…
In the op-ed, I cite measures of longer-term inflation expectations staying anchored as evidence to support a decline in inflation by the end of 2022. In earlier posts, Madi and I showed that neither surveys or bond markets are good forecasters of inflation....
Oct 1, 2021 • 8 tweets • 2 min read
As usual, @Neil_Irwin puts his finger on the most interesting economic controversy of the day. This time it is Fed staffer Jeremy Rudd’s attack on the fetishization of measures of inflation expectations as drivers and predictors of actual inflation. 1/n nytimes.com/2021/10/01/ups…
I agree with much of what Jeremy says and what my colleague @AdamPosen says in Neil’s article. Yet I also think inflation expectations matter, as do they, I suspect. How to square that circle? 2/n
Mar 20, 2021 • 11 tweets • 11 min read
@mattyglesias As someone who agrees with @LHSummers that the stimulus is too big but also agrees with @PaulKrugman that the consequences will be more positive than negative, here is a thread. There is a simple issue of arithmetic and a trickier issue of behavior. @Noahpinion 1/n@mattyglesias@LHSummers@paulkrugman@Noahpinion Disagreement over the output gap last quarter is pretty small, between 3% and 6% of GDP, depending on whether you believe CBO or EconTwitter. Growth is looking way above trend in the current quarter. Reopening of sectors should by itself cause above-trend growth all year. 2/n
Nov 26, 2019 • 8 tweets • 2 min read
Very excited about my latest paper with Chris Collins at PIIE. “Are Central Banks Out of Ammunition to Fight a Recession? Not Quite.” piie.com/publications/p… 1/8
We make 4 key points: First, the US Federal Reserve has room to cut short- and long-term interest rates (thru QE) that is sufficient for a mild recession, but not a severe one. 2/8
