Money and Government: The Past and Future of Economics
by Robert Skidelsky · 13 Nov 2018
later advocated by the IMF as a condition for loans to needy countries. Although monetary policy (and, even more so, fiscal policy, which operates with ‘long and variable lags’) is ruled out as a short-term 181 T h e R i s e , T r i u m p h a n d
The Lords of Easy Money: How the Federal Reserve Broke the American Economy
by Christopher Leonard · 11 Jan 2022 · 416pp · 124,469 words
itself fully in the world as the effects filtered out through the banking system and economy. “Monetary policy operates with what they refer to as ‘long and variable lags,’ ” Hoenig said later. He said this repeatedly, sometimes in a way that looked like he wanted to pound the table to get his point across
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the powerful consequences of the FOMC’s decisions. Hoenig had overseen the banks when prices and asset values were climbing, and he had seen the long and variable lags that occurred when the FOMC kept money too cheap for too long. It had fallen to him to dispatch the failed banks after Volcker brought
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Greenspan was pushing to cut interest rates at a time when Hoenig believed rates were already low enough. Hoenig was haunted by the rule of long and variable lags, and the experience of watching the FOMC create the Great Inflation without even realizing it. Rate cuts were often presented as a form of “insurance
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the year. When it was Hoenig’s turn to talk at the FOMC meeting that month, he once again counseled caution and restraint, worrying about long and variable lags. He pointed out that interest rates had already been cut to 2 percent from more than 6 percent just one year earlier. “Mr. Chairman, I
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that emphasized restraint, incrementalism, and limits on how far the Fed should push its powers. The first pillar of the approach was the law of long and variable lags. If there was one thing Hoenig had learned, it was that the Fed’s leaders, who were only human, tended to focus on short-term
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, if it was worried about inflation, because it might cause a precipitous collapse. The need for restraint was made more important by the law of long and variable lags. Because it took so long for the Fed’s actions to have an effect, Hoenig believed the FOMC needed to patiently monitor conditions in the
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, 53, 55, 58–59, 63, 67, 201, 203 Kansas City Fed presidency appointment, 5, 67–68 Kansas City Fed retirement of, 34, 120, 200, 201 long and variable lags as concern of, 62, 68, 82, 94–95 marriage of, 41 master’s thesis of, 42–43 as Mellonist, 17, 18 at Mercatus Center, 257
The Measure of Progress: Counting What Really Matters
by Diane Coyle · 15 Apr 2025 · 321pp · 112,477 words
J curve”: at the firm level, productivity first declines when new technology is adopted, before it then increases (Brynjolfsson et al. 2021). This phenomenon of long and variable lags has also been noted often in the economic history literature, famously so by Paul David (1990), who, in documenting the half c
Wall Street: How It Works And for Whom
by Doug Henwood · 30 Aug 1998 · 586pp · 159,901 words
a precision instrument for offsetting the forces making for instability in money income. Unfortunately, the loose relation between money and income over short periods, the long and variable lag between changes in the quantity of money and other variables, and the often conflicting objectives of policy-makers preclude precise offsetting control" (Friedman 1992). Now
Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis
by Anatole Kaletsky · 22 Jun 2010 · 484pp · 136,735 words
in a modern capitalist economy and the influence on inflation of any of these ways of measuring the money supply can be observed only with “long and variable lags.”12 Modern monetary economics initially tried to dodge this problem by looking for one correct definition of the money supply that would always correlate closely
The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum · 4 Sep 2019 · 614pp · 174,226 words
the government to print even more money to achieve the same effect. 73. Friedman’s view that the effects of monetary policy were felt after “long and variable lags” is a prime example of an idea that is now so conventional that Friedman is rarely given credit, nor is it widely remembered that his