The Taxonomy of Nerds

Cardiff Garcia wrote a nice summary of the various positions by many econ bloggers and which gives a nice overview of how we all stack up against one another.  I am honored and appalled to make the list of nerds.  About me, he says:

– Cullen Roche bears the standard for the Modern Monetary Realists, a splinter faction of the Modern Monetary Theorists. He doesn’t much like QE and is sceptical that monetary policy can hit its targets without help.

But he will tolerate NGDPLT so long as fiscal policy is leading the crisis-fighting charge and the two are working in concert. (MMR/MMT is different from Keynesian in non-ZLB settings, but they’re basically the same at the zero lower bound — hence “fiscalists”.)

Eh, close enough.  We don’t go by “MMR” (it’s just Monetary Realism or MR), but whatever.  Who needs labels?  I also wouldn’t say I back a specific policy at all times, but rather that I’ve been a proponent of fiscal policy over the last 5 years because of my understanding of the balance sheet recession and the likelihood that monetary policy would be less effective than usual.  That doesn’t mean monetary policy is void of value or pointless (I think QE1 helped a lot and I think QE^n could be more effective if it was done differently).  It just means I don’t think it’s being done properly in most countries and that it’s less effective now than usual.

That said, Cardiff’s post is a nice summary for those looking for an overview of the conglomerate of econ nerds.


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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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  • jt26

    Cullen, does MR have an “position” on NGDPLT? Based on what I’ve read at MR, there doesn’t seem to be any consensus (at least among the most frequent commentators and MR movers and shakers). I get the impression that although you “tolerate” it, Mike likes it and others hate it.

  • SS

    Looks like Cardiff didn’t get the whole story right.

    1 – MMR is wrong.
    2 – It’s not just a subset of MMT, but more a subset of post-keynesian economics.
    3 – MR is mostly just descriptive and doesn’t take specific fiscalist positions.

  • Cullen Roche

    Yeah, MR doesn’t really have a specific stance on it. I think we all kind of feel differently about. That’s the thing about MR – you can understand the basics of MR and then decide what policy YOU prefer. You could go full on Anarchist, Marxist, Fiscalist, Monetarist, etc. There is no one size fits all approach and I think that’s one of the key lessons from MR. But just make sure you understand the operational realities before building a policy position. My position on NGDPLT is that it has been implemented wrong at various points and could be more effective than it is, but I would still prefer fiscal (tax cuts or spending) because of the specifics of the current economic environment.

  • Dunce Cap Aficionado

    I think I saw a suggestion from Jerry (ArmoTrader) on Twitter to make an axis an place all the different sets and subsets on it. I like that idea very much.

  • Tom Brown

    I’ll have to look at that Taxonomy…. sounds interesting.

    BTW, regarding NGDPLT, I asked Rowe on his sight if ANY country is doing monetary policy right in his book… Sumner answered. He said Australia comes closest:

    I wonder if that was too easy of a question on my part. Pick any country that’s been doing reasonably well, and claim “this one: this is the one that’s come closest to following my policy.” Ha!

  • Tom Brown

    Yeah, its too bad he botched MR and you a bit… but overall it was a good article. I wonder if everybody else is grumbling a bit about their blurbs right now. Ha!

    I can see him getting the MMR vs MR thing wrong… up until fairly recently I still saw MMR on in places. I just checked again, but didn’t see it.

    Ah! here’s an example:

    All I did was Google the following: “modern monetary realism”

    Somebody should really do the same over there and hunt down each occurrence and eliminate it.

  • Tom Brown

    Well might as well give you the list directly I guess:…1318.11299.0.11555.…0.0…1c.1.17.hp.lTbrPtjX2is

  • Cullen Roche

    He fixed it. Cardiff’s a great guy. A Georgetown guy so it’s not surprising. :-)

  • Tom Brown

    Ha!… did you let him know? Your alma mater I presume? … now just needs to be fixed.

  • TheArmoTrader

    Ha. Still find it weird when your randomly reading the comments and somebody mentions you. Yeah. I’d love to see some type of “economic spectrum” axis/graph that’s similar to the political spectrum graphs. (Where they have y/x axis and X is either demi/repub and Y is usually something like Libertarian and Statist.)


    Can not understand that MR can be compatible with NGDPLT since there is no transmission mechanism, unless the Fed do fiscal policy. Which would basicly undermine the US democracy. My impression was that the Fed should not have done Q1 because they overpaid for assets, which is in my opinion fiscal policy. Maybe the Fed could target the price level outside of a balance sheet recession. So would agree with you that monetary policy can achive its goals at times where it is not important, since probably inflation will be high enough anyway. My mani point is that if one do not believe in the money multiplier there is no transmission mechanism, and hence NGDPLT should be discarded.

    By the way, I agree that Q1 helped the economy.

  • jt26

    I always find Sumner’s answers on NGDPLT examples circular. “If the US had stopped NGDP from falling it would prove NGDPLT.” “Australia has had (accidental?) NGDPLT and look, no recessions.” Ok … Wait til the next recession … when your largest trading partner has a recession and the bull market in commodity ends. But when that happens, it will be the RBA’s fault.

  • Cullen Roche

    There are other transmission mechanisms. For instance, the Fed could target long rates explicitly or it could set foreign exchange rates. The point is, I think the Fed has to do more than just set targets. It has to coordinate these targets with other real policies. In my opinion, the power of setting targets is not in the threat to defend the target, but the actual act of defending the target in order to convince the market it will defend its targets. I just don’t buy into the MMers jedi mind trick approach. The Fed doesn’t enact policy simply by saying. It enacts policy by sometimes having to prove it can act as well….