03 - John Cochrane on Finance, the Fiscal Theory of the Price Level, and Blogging
Macro Musings with David Beckworth
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The Fiscal Theory of the Price Level
The policy world is and should be 30 to 40 years behind the research frontier. Most of the policy world right now thinks in pretty unadorned mid 1970s, Dornbers and Fisher, ISLM with an acceleration to still obscure. The questions you ask me are exactly the right questions. We've done the deep theory. We know the framework works. We've started to think about how do you adapt the framework to real world bridges? That's why Paul couldn't do it. Why don't academics jump on board to do this work? Well, I hope they will.
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