Ahh I see two Tyler Cowen posts up in the past 24 hours that I have to list down for future reference:
- On the jump in bond rates as the Fed suggested a tapering in QE was in sight.
- On the differences of views between the economics community and economics blogs.
I would note a couple of things.
The term structure of interest rates are always confusing – and hard to interpret without reference to other variables at the same time. The drop in asset and commodity prices at the same time as the drop in bond prices indicates “tighter monetary policy” (I prefer avoiding the bubble line – as the word is a bit loaded, and a ‘bubble’ based on cheap credit is different than a ‘bubble’ based on out of whack expectations … in fact I wouldn’t even use the term in the first case) – the real question of interest for me is “what were expectations of Fed tapering prior to the announcement”? This seems like a strange reaction for an announcement that in many ways should have been expected! [Add this from Money Illusion, and all the links within – the simultaneous events in the US and China make this a messy thing to read indeed]
And in terms of blogs, Cowen is right that economists are generally less overconfident and moralistic in their research than they are on blogs. Economics research is neat to read, and is unlikely to get you hot under the collar in the same way blogs do 😉 . Now this is the difference between writing as an economic researcher, and writing as an individual, so it should really be expected 😉