Harping on the Fed Index

1. Likely fall in nominal GDP between 2008 and 2009: 1%

Last time NGDP fell that rapidly: 1937-38

2. Fall in monetary base during first half of 2009: 3.1%

Last time monetary base fell that fast in first half (excluding post-Y2K fall): 1938

3. Current yield on 3 month T-bills: 0.18%

Yield on 3 month T-bills on January 1st, 1938: 0.10%

4. Date Fed first instituted a policy of paying banks to hoard reserves: October 2008.

Previous time Fed instituted a policy which increased the demand for reserves: 1937

5. Increase in the minimum wage since 2007: 41% ($5.15 to $7.25)

Largest percentage increase in the minimum wage: Infinity, November 1938 ($0 to $0.25)

6. Percentage of US economists who want to see the minimum wage completely eliminated: 47%

Voting pattern of US economists: 3 to 1 Democratic

7. Change in the PPI between June 2008 and June 2009: -13.2%

Change in the PPI between June 1937 and June 1938: -10.0%

8. Change in the DJIA between August 31, 2008 and November 20, 2008: -34.6%

Change in the DJIA between August 31, 1937 and November 20, 1937: -33.4%

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About Scott Sumner 492 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

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