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BadEconomics Discussion Thread, 23 September 2015 (self.badeconomics)

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[–]wumbotarianmodeled as if Noah Smith was a can opener 0ポイント1ポイント  (1子コメント)

GG Scott Sumner

So this was released.

Not sure what to think about it. I'd like to see how Breakeven Inflation fares (something I can do later in life in grad school!).

The only thing I can say is "1-year forecasts are more-or-less crap shoots".

Breakeven inflation picked up the actual deflation we had during the recession. SPF didn't.

FWIW, SPF didn't do jack all in my regressions for my senior thesis. BE Inf sorta did. One of the Fed branches has a cool data set that does even better. However they finagle expected inflation might be useful for predicting inflation.

[–]IntegraldsI am the rep agent AMA 0ポイント1ポイント  (0子コメント)

SPF moves more slowly than TIPS spreads.

For what it's worth, I'm getting great results with SPF data in my Phillips Curve regressions, as are Coibion (at UT-Austin) and Fuhrer (at the Boston Fed). So perhaps they're good on some dimensions but not others.

market-based inflation expectations are poor predictors of future inflation. This suggests that these measures contain little forward-looking information about future inflation.

Isn't there crippling endogeneity here? Whenever TIPS spreads fall, the Fed takes action to ensure that the low inflation implied by TIPS doesn't occur.

We find that market-based measures of inflation are poor predictors of future inflation. In particular, they perform much worse than forecasts constructed from survey expectations of future inflation, which incorporate all the information used by professional forecasters.

That's strong language given the weakness of their results. My eyeball evaluation of Figure 2 is that all forecasts have roughly similar forecast errors, not that TIPS are "much worse" than SPF.

[–]ethyn408 0ポイント1ポイント  (2子コメント)

Wow, I've never seen one of these threads with less than ten comments.

[–]fmn13Canadian Labor Reserves 0ポイント1ポイント  (0子コメント)

We all seem to agree NYT!Krugman is worse and way more cooky and prone to /be than 90's!Krugman but are there specific examples of him saying very controversial/wrong things?