September, 2009

Clearing up Some Miscommunication

by Scott Sumner
The Conversation
September 29th, 2009

Hamilton and I are still miscommunicating on two points. Professor Hamilton continues to argue that if the Fed promised to buy or sell unlimited amounts of 12 month forward NGDP futures contracts at a five percent premium over current NGDP, it might lead to an almost infinite demand for such contracts if someone expected six [...]

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Taxing Banks for Holding Reserves

by Jeffrey Rogers Hummel
The Conversation
September 28th, 2009

In his first reply to the three of us, Scott Sumner asked: “Does anyone have any thoughts on my proposal to charge a negative interest rate on excess reserves as a way of reducing the hoarding of base money? Sweden recently adopted this proposal.” (I assume Scott meant “charge a positive interest rate,” which is [...]

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