I learned about you at McCombs 15 years ago, you're a brilliant guy, and I've read a lot of your stuff ever since. It's helped me make money on stocks--particularly your ERP model.
But I have to say, I'm a little surprised you haven't looked into the expectations-based model by Market Monetarists like Scott Sumner, David Beckworth, Lars Christensen for explaining changes in both short-term and long-term rates. I like how they distinguish between the "liquidity effect" and the "inflation effect."
I learned about you at McCombs 15 years ago, you're a brilliant guy, and I've read a lot of your stuff ever since. It's helped me make money on stocks--particularly your ERP model.
But I have to say, I'm a little surprised you haven't looked into the expectations-based model by Market Monetarists like Scott Sumner, David Beckworth, Lars Christensen for explaining changes in both short-term and long-term rates. I like how they distinguish between the "liquidity effect" and the "inflation effect."
A superb new post explaining a bunch of this: https://scottsumner.substack.com/p/financial-conditions-index-targeting
Thank you Aswath, superb analysis, explanation and commentary.
I’m interested if you agree with the thesis of deflationary pressure from AI and secondly its impact on Fiscal and Monetary decision making?