James L. Caton
Articles
No, This Is Not 1970s Style Stagflation
“The FOMC’s current policy stance has precipitated a recession that may modestly deepen as it tardily-but-effectively pursues its commitment to restraining inflation.” ~ James L. Caton
The Race to Tame Inflation Expectations
“If the FOMC thinks inflation should be higher than 2 percent on average, it should adopt a higher inflation target—say, 3 percent—and compensate for periods of excess inflation by also promoting inflation rates below the average target for extended periods.” ~ James L. Caton
Making Sense of Monetary Policy and the Future of Inflation
“The expansion of circulating currency has diminished to rates comparable to pre-pandemic lows. These factors and the current state of business inventories suggest that inflationary pressures are likely near their limit.” ~ James L. Caton
Inflation: What Causes It, and When Will it Subside?
“The growth rate of currency in circulation has been back to pre-crisis rates for at least 2 quarters. We should expect inflation and the growth rate of expenditures to follow and inflationary winds to subside as a result.” ~ James L. Caton
How Will Russia Respond to Financial Sanctions?
“The sanctions are intended to increase the cost of war for the Russian government. Russia currently finds itself outside of the global financial system. Over time, however, the burden of financial sanctions will weaken.” ~ James L. Caton
Did Ben Bernanke Implement QE before the 2008 Financial Crisis?
“The Bernanke Fed was practicing QE much earlier than is widely thought. This early QE experiment, likely intended to stabilize short-term inflation expectations, transformed monetary policy prior to the crisis.” ~ James L. Caton
Is This What Monetary Tightening Looks Like?
“When will the Federal Reserve begin to unwind its balance sheet this time? If the meeting minutes indicate the trajectory of policy, reductions will begin within the next two years.” ~ James L. Caton
The New Status Quo for Public Finance
“After the 2008 financial crisis, the US never returned to pre-crisis growth levels. My expectation is that unless private investors find a means of avoiding this subsidization of federal borrowing, we never will.” ~ James L. Caton
Crowding Out Under Quantitative Easing
“The data speaks loudly. An accommodative monetary policy has failed to facilitate a robust economic recovery. And an artificially low federal funds rate is pumping up the federal debt and weighing on private investment.” ~ James L. Caton
Is Larry Summers Channeling Benjamin Anderson?
“The post-2008 framework has incentivized the destabilization of monetary policy. The sooner we recognize this fact, the sooner we can seriously discuss a solution to the problem.” ~ James L. Caton
