Thursday, January 7, 2016

On our way down ...

FRED just released the bi-weekly data for the monetary base (it showed it was updated 14 seconds ago when I looked at it) and it appears to be on the downward path towards the information equilibrium prediction of about 2.6 trillion:


I'll update the model graph when I get a chance [update: updated, with additional zoomed in version] ...



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5 comments:

  1. Tom BrownJanuary 7, 2016 at 3:52 PM

    This comment has been removed by the author.

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  2. AnonymousJanuary 8, 2016 at 3:45 PM

    Jason, keep in mind that Fed itself doesn't appear to be changing its balance sheet at all. Congress snatched some accrued capital, and reserves are off (don't have time right now to dissect, but I'm interested over what's taking on the slack.)

    https://research.stlouisfed.org/fred2/graph/?g=3542

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    Replies
    1. Jason SmithJanuary 8, 2016 at 3:53 PM

      Thanks for the graph.

      It appears total liabilities are nearly a trillion dollars greater than the adjusted monetary base

      https://research.stlouisfed.org/fred2/graph/?g=354t

      Monetary base is what is in the model, however, not total liabilities. It is interesting that the balance sheet is remaining constant here, though ...

      Delete
  3. Todd ZorickJanuary 8, 2016 at 5:03 PM

    What does this imply for NGDP going forward?

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    Replies
    1. Jason SmithJanuary 8, 2016 at 5:04 PM

      This model makes an assumption that NGDP continues roughly stable log-linear growth.

      Delete

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