How the Fed can stave off deflation

Harvard economist and former chairman of the council of economic advisors, Grega Mankiw has some thoughts:

Suppose the Fed cuts the federal funds rate once again to, say, 25 basis points. More important, at the same time, the Fed announces a target path for the price level as measured by the core CPI. The price path might be, say, an increase of 2 or 3 percent per year. The Fed promises not to raise the fed funds rate over the next 12 months and, after that, will keep the funds rate at that low level as long as the

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Daily Brief

There has been much discussion in the blogosphere about whether Goldman Sachs should go private. (A good summary can be found here.) One could forgive such wistful thinking today, as shares of Goldman fell below its initial public offering price.

When Goldman went public in May 1999, at $53 per share, it was a watershed event. The firm was the last big Wall Street partnership to go public. The decision to go public had set off intense debate within the firm and ultimately led to the resignation of Jon Corzine, the co-chairman and co-chief executive who had pushed...

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Ugly

If you thought that the sudden sell-off from yesterday afternoon would reverse itself in morning trade, think again: this is looking increasingly like a secular down market rather than simply a case of high volatility. Citi's down further this morning, a vote of confidence from one of its largest shareholders notwithstanding; Berkshire Hathway's tumbling too; and Americans are now being laid off at the rate of more than half a million a week. Oh, and the market cap of the entire New York Times Company is now less than $1 billion, which is less than...

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Green economics

Oh please, not this stupidity again.

The Government provoked protests from campaign groups yesterday as it began Europe's first auction of carbon emissions permits but admitted that the proceeds would not necessarily be used to tackle climate change.

The Treasury said that it had raised £54 million through the sale of four million permits for £13.60 per tonne under the next stage of the European Union's Emissions Trading Scheme (ETS). Yesterday's auction marked a departure from the policy of handing out the permits to industry for free. By 2012, in the second phase of the scheme,...

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