Robert Hetzel on the monetary response to Covid19

There are few economists that have had a bigger influence on my thinking about monetary matters than former Richmond Fed economist Robert Hetzel.

Bob is not only one of my biggest intellectual heroes, but also a very a good friend and I am therefore extremely happy that he has allowed to publish some of this insights and thoughts on Fed’s 50bp ’emergency’ rate cut today.

Lars Christensen

Fed and…

The ECB’s large scale quantitative easing programme already has had some success – initially inflation expectations increased, European stock markets performed nicely and the euro has continued to weaken. This overall means that this effectively is monetary easing and that we should expect it to help nominal spending growth in the euro zone accelerate and thereby also should be expected to curb…

At 25 Bob Hetzel had become a Friedmanite. At 80 Milton Friedman had become a Hetzelian

Watch this after 11:35.

…yes, Friedman went further than Bob. Friedman had also become a market monetarist. He wanted to use the market not only to evaluate monetary policy, but also to implement monetary policy.

Celebrating Friedman and Hetzel

Today Milton Friedman would have turned 102 years. Happy birthday Uncle Milty!

I have over the last couple of years done numerous posts celebrating Milton Friedman so this post will not be long. Instead I will leave the job to Robert Hetzel who I am also celebrating this year as Bob turned 70 years on July 3.

So I find it suiting that my readers should read Bob’s paper The Contributions of Milton…

Today is the day. July 3 2014. Robert Hetzel is turning 70 today. Happy birthday Bob! I hope you will have a great day with your wife Mary and the rest of your family.

To quote myself:

Bob has been a great inspiration to me since the early 1990s and he is undoubtedly one of the economists who have had the greatest influence on my own thinking about monetary matters. Equally important today is…

The Fisher-Hetzel Standard: A much improved “gold standard”

Anybody who follow my blog will know that I am not a great fan of the gold standard or any other form of fixed exchange rate policy. However, I am a great fan of policy rules that reduces monetary policy discretion to an absolute minimum.

Central bankers’ discretionary power should be constraint and I fundamentally share Milton Friedman’s ideal that the central bank should be replaced by a…

The ECB should give Bob Hetzel a call

The ECB is very eager to stress that the monetary transmission mechanism in some way is broken and that the policy measures needed is not quantitative easing, but measures to repair the monetary transmission mechanism.

In regard to ECB’s position I find this quote from a excellent paper – What Is a Central Bank? – by Bob Hetzel very interesting:

For example, in Japan, the argument is common that…

Time to get government out of US housing finance

Scott Sumner has a great post on the very scary state of US housing finance. This is something that many Europeans might not realise, but when it comes to housing finance the US is likely one of the most socialist countries among the developed economies of the world.

This is from the Wall Street Journal article Scott quotes in his post:

Fannie and Freddie, which remain under U.S. conservatorship,…