October 2009 Archives

Today is the 30th anniversary of the secret Saturday night meeting of the FOMC that shifted the Fed's focus to bank reserves rather than an explicit target for the fed funds rate.

Students of monetary policy and the Fed may enjoy reading about this famous episode in which the Fed took a hard line stance against inflation--and won.

Short version

Long version

From Reuters:

SYDNEY (Reuters) - Australia's central bank raised its key cash rate by 25 basis points to 3.25 percent on Tuesday, as surprising economic strength allowed it to withdraw some of the exceptional stimulus doled out during the global credit crisis.

How long before others follow suit?

This weekend, I am doing something that seldom happens.

I'm cheering for the White Sox.

You know why.

UPDATE:  Well, the Twins did their part, and the White Sox disappointed on the last day.  But it was enough.  One game on Tuesday to decide it.

Professor Narayana Kocherlakota of the University of Minnesota has been selected as the next president of the Minneapolis Fed.

But what you probably didn't know is that Narayana was my professor at the University of Iowa back in my grad school days.  He taught the second semester, first year macro course.  It was a great course--very challenging.  He also kept the department seminars pretty lively, as he has a very critical eye.  If you've overlooked something in your model, chances are pretty good he'll spot it.  As soon as I got to know him I admired his dedication and work ethic, not to mention his vast knowledge of economics.  In 1995, the Ph.D. students at Iowa voted to give him the Professional Excellence in Training Economists Award.  (This was at the end of my first year.)  The award is given to those faculty who really earn the respect and admiration of the students.  It's not taken lightly.  I couldn't have agreed more with the award, and I am extremely happy to see him take on this next challenge.

Congratulations, Narayana!