What we’re reading (10/20)
“Why I Fear The Fed May Be Overdoing It” (Greg Mankiw’s Blog). “The question is, how much monetary tightening is in order? This question is hard, and anyone who claims to know the answer for sure is not being honest either with you or with themselves. The reason it is hard is that monetary policy works with a substantial lag. It is no surprise that the recent Fed tightening hasn't had much impact on inflation yet. That is no reason to think the Fed needs to tighten a lot more. The Fed made the mistake of waiting for inflation to appear before starting to tighten. It would be a similar mistake to wait for inflation to return to target before stopping the tightening cycle.”
“Valuations and Earnings Growth” (Larry Swedroe). “The historical evidence demonstrates that an investment strategy that bets on growth is a strategy likely to disappoint because growth is neither persistent nor predictable and because value stocks should have an embedded risk premium (noting that risks, of course, can and do show up).”
“U.K. Government Is High-Profile Casualty In World Of Higher Borrowing Costs” (Wall Street Journal). “For the past decade, low inflation and ultralow interest rates gave governments around the world room to spend more and pile on debt without alarming investors. Those days are over. With central banks tightening monetary policy, political leaders are less able to borrow money without raising questions about how they will repay it, in part because higher borrowing costs make debt more expensive and in part because governments already loaded up on debt during the Covid-19 pandemic.”
“How The ‘Black Death’ Left Its Genetic Mark On Future Generations” (New York Times). “When the Black Death struck Europe in 1348, the bacterial infection killed large swaths of people across the continent, driving the strongest pulse of natural selection yet measured in humans, the new study found. It turns out that certain genetic variants made people far more likely to survive the plague. But this protection came with a price: People who inherit the plague-resistant mutations run a higher risk of immune disorders such as Crohn’s disease.”
“A Vision Of Metascience” (Science Plus). “How does the culture of science change and improve? Many people have identified shortcomings in core social processes of science, such as peer review, how grants are awarded, how people are selected to become scientists, and so on. Yet despite often compelling criticisms, strong barriers inhibit widespread change in such social processes. The result is near stasis, and apathy about the prospects for improvement.”
