Econ Club: It's about logic, not emotion.

Under the guise of Econ Club, I have sat in many of bars alongside peers and professors, attempting to solve the world’s problems with economic logic. Couched primarily in economic topics, attendees are encouraged to be blunt, using logic not opinion to discuss current events. It is because of the success of these meetings and encouragement from past participants that I am moving Econ Club into blog form. As such, post articles, comment on them and of course keep a refreshing beer nearby.

Wednesday, June 11, 2008

Is the Fed Impotent?

John Hussman, the manager of Hussman Funds, writes a weekly commentary that is followed closely by my firm as well as many others involved in the investment world. In his most recent commmentary he examines the value of monetary policy in relation to fiscal policy. He does an interesting mental exercise utilizing game theory and "Circus Peanuts" to understand Bernanke's real options for interest rate changes. Is it true that the Fed is impotent?

http://hussmanfunds.com/wmc/wmc080609.htm

1 comment:

Ian said...: I don't think the message was impotence. Hussman attempts to systematize and predict "rational choice" by the Fed in the face of uncertainty. What Bernanke chooses to do with rates will certainly impact the economy. The question is whether that impact is washed over by forces beyond his control -- persistency in credit turmoil and the upward spiral in commodity prices, among others.; June 12, 2008 at 11:00 AM