I am currently at a blogging conference in Berkeley. Meeting people here has pushed me to think about how I would summarize my blogging. One approach would be to list a bunch of unconventional claims that I have made in various posts over the past 15 years:

1. The Great Recession is usually linked to the financial crisis, but it was actually caused by a tight money policy.

2. Monetary policy is usually linked to interest rates, whereas interest rates have little or nothing to do with monetary policy, which is better described in terms of nominal GDP.

3. Economists are often seen as people who predict the business cycle. In fact economists are unable to predict recessions and major moves in inflation, and shouldn’t even try.

4. Asset price bubbles are widely seen as occurring in various markets, whereas in fact bubbles do not exist.

BTW, none of these claims are precisely true, they are all useful approximations of reality—true in the sense that Newtonian mechanics is approximately true (albeit much less accurate than Newtonian mechanics.)

I could add many more contrarian views to this list (fiscal multiplier is near zero, price gouging is good for consumers, etc., etc.), but I’ll focus on these 4. Should we think of this “market monetarist” model as being analogous to something like MMT—a heterodox model that rejects textbook economics? I don’t think so.

In an essay discussing his battle with protectionists in the Clinton administration, Paul Krugman offered this piece of advice:

(ii) Adopt the stance of rebel: There is nothing that plays worse in our culture than seeming to be the stodgy defender of old ideas, no matter how true those ideas may be. Luckily, at this point the orthodoxy of the academic economists is very much a minority position among intellectuals in general; one can seem to be a courageous maverick, boldly challenging the powers that be, by reciting the contents of a standard textbook. It has worked for me!

That really resonated with me.  All my wildly controversial ideas are 100% built up with standard textbook economic building blocks.  In my blog posts (and in The Money Illusion book) I frequently cite popular textbooks as well as the claims made by mainstream macroeconomists that do not hold my unconventional views.  I show that although they do not agree with me, my claims are the natural implication of many of the things that they have been writing and saying over the years.  In that sense, market monetarism is nothing like MMT.  It’s also quite heterodox; but only in its conclusions, not in terms of its underlying model.

Another way of thinking of my blogging is in terms of some even more basic “tools” that allowed me to reach these various controversial claims:

1.  Never reason from a price change

2.  Monetary offset

3.  Efficient markets hypothesis

You could say that my blog is about applying these tools to a wide variety of problems.  For instance, all three tools played a role in my reaching the conclusion that the Fed caused the 2008 recession.  Never reason from a price change allowed me to look at the situation without being misled by low and declining interest rates.  The EMH allowed me to see that almost all of the asset markets were signaling that money was too tight.  And I understood that the central bank could have and should have used monetary policy to offset the drag to the economy (specifically NGDP) caused by other factors such as a decline in the property market.

I am sometimes associated with the advocacy of NGDP targeting.  But lots of economists favor NGDP targeting (many more than when I started blogging).  It’s the controversial claims that make my blog distinctive.