Why have epidemiological forecasts been so wrong and what to do about it

Why have epidemiological forecasts been so wrong and what to do about it If we look at the forecasts, we got from epidemiologists initially in the Covid-19 pandemic it has turned out that they have massively wrong. While tragic the number of people who has died in this pandemic has been much lower than forecasted. […]

Heading for double-digit US inflation

I have spend a lot of my time since 2008 arguing that US monetary policy was much less expansionary than most people thought and has been arguing for a more aggressive response from the Federal Reserve to combat deflationary pressures. Furthermore, I have last year welcomed the Fed’s policy respond to the lockdown crisis – […]

Re-visiting R*: Close to the end of the hiking cycle for the Fed

Last week I wrote a blog post in which I updated my outlook for US inflation based on the so-called P-star model. In that blog post, I argued that my forecast in April 2021 for much higher US inflation essentially had been spot on, but also that inflation now is set to start to inch […]

R* strikes back: The Fed will hike sooner rather than later

The Federal Reserve’s mandate is clear – ensuring the maximum level of employment while at the same time ensuring price stability. Over time the Fed’s interpretation of this mandate has changed, but we can maybe get a bit closer by saying that the Fed has an ordering of the dual mandate. First the Fed wants […]

When Americans vote in November unemployment will be below 6%

Friday’s US labour market report rightly got a lot of media attention globally. The spike in US unemployment to 15% surely is historical and tells us quite a bit about just how big a shock has hit the US and the global economy. However, where most commentators are wrong is assuming that this has to […]

Did you book your speaker? Book me

Did you book your speaker for this year’s seminar or conference? You might as well book me! See a sample of my speeches here. To book me internationally see here. In Denmark see here. Or contact me directly: LC@mamoadvisory.com Recent speaking topics include: Populism and the global economy and markets 1930s style politics: Monetary policy failure […]

Rational investors and irrational voters

It seems like there is a bit of a gap opening between prediction markets and opinion polls when it comes to the likely outcome of the US presidential elections in recent days. Hence, the prediction market Predictit now has a 81% (19%) implied probability that Clinton (Trump) will win, while the opinion poll aggregator over […]

Do economists know what will happen in 2016?

For the last couple of months I have been writing a weekly column for the Icelandic newspaper Fréttablaðið. I enjoy it a lot. First of all it keeps me in contact with Iceland – a country that since 2006 has been an important part of my professional and personal life. Second, it is a good […]

Three simple changes to the Fed’s policy framework

Frankly speaking I don’t feel like commenting much on the FOMC’s decision today to keep the Fed fund target unchanged – it was as expected, but sadly it is very clear that the Fed has not given up the 1970s style focus on the Phillips curve and on the US labour market rather than focusing […]

Sunday notes – Three working papers and three prediction markets

It is Sunday morning and I really shouldn’t be blogging, but I just have time to share a couple of working papers with you. First on the list yet another great paper from my friend Bob Hetzel at the Richmond Fed – “A Comparison of Greece and Germany: Lessons for the Eurozone?” Here is the […]