tag:blogger.com,1999:blog-5713178645208582139.post5622843827612852108..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Bernanke's "Radicalism" is Already WorkingDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5713178645208582139.post-87207241542901912132010-11-02T08:33:53.197-05:002010-11-02T08:33:53.197-05:00There's a lot wrong in these comments.
Of cou...There's a lot wrong in these comments.<br /><br />Of course they tried to stimulate AD. That is the whole purpose of QE. To say otherwise is sheer semantics and nonsense.<br /><br />You don't appear to want to confront the real evidence with regards to how QE functions. You argue that it results in an export boom. But all three historical cases showed little to no change in trade weightedMarkSnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-2412970694183417902010-11-02T02:10:08.446-05:002010-11-02T02:10:08.446-05:00What more we need is action, substance, to follow ...What more we need is action, substance, to follow the Fed.s talk. If the action doesn't live up to the talk, the markets won't keep predicting higher inflation.Richard H. Serlinhttps://www.blogger.com/profile/09824966626830758801noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42751431667144211782010-11-01T20:49:31.183-05:002010-11-01T20:49:31.183-05:00MarkS:
Again, the BOJ never really tried to stimu...MarkS:<br /><br />Again, the BOJ never really tried to stimulate AD. All it tired to do is prevent deflation. This is widely understood. In the UK they recently had higher real GDP growth than expected along with relatively high inflation. Here is an excerpt from a <a href="http://online.wsj.com/article/SB10001424052702303390704575575890184593152.html?mod=ITP_pageone_3" rel="nofollow">WSJ</a> David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-24543524585379885912010-11-01T20:18:16.744-05:002010-11-01T20:18:16.744-05:00Lee,
We agree on that.
But you do not explain ...Lee,<br /><br />We agree on that. <br /><br />But you do not explain to how QE will address the current problem and why history shows that is hasn't. <br /><br />QE's only real hope of working is via the lending mechanism and your comment appears to imply that you don't think that will happen which makes me wonder why you are defending QE....<br /><br />Thanks,<br /><br />MarkMarkSnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-32704235012010929302010-11-01T19:28:14.317-05:002010-11-01T19:28:14.317-05:00MarkS,
You are confusing money and credit. An exc...MarkS,<br /><br />You are confusing money and credit. An excess demand for money, all else being equal, reduces the demand for credit. Why? Because an excess demand for money increases the burden of debt.Lee Kellynoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-23106737157262016362010-11-01T17:42:02.623-05:002010-11-01T17:42:02.623-05:00David,
Thanks for the reply.
If QE worked in t...David,<br /><br />Thanks for the reply. <br /><br />If QE worked in the UK then why is demand for money via loans so weak? There has been no significant pick-up in borrowing. The same can be said of the USA after QE1 and it is certainly true of Japan. None of these cases resulted in sustained economic recovery and the evidence of higher AD or inflation as a result of QE is very weak at best.MarkSnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-18326111361210495982010-11-01T17:18:16.046-05:002010-11-01T17:18:16.046-05:00ECB:
Interesting question. Note also that broad m...ECB:<br /><br />Interesting question. Note also that broad monetary aggregates (M2, MZM) are increasing. Maybe the Fed is trying to encourage the growth of inside money while allowing some reduction of inside money.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42002132573885894252010-11-01T17:16:11.906-05:002010-11-01T17:16:11.906-05:00Mark S,
actually no. Bernanke and the Fed have on...Mark S,<br /><br />actually no. Bernanke and the Fed have only been talking up their concerns about inflation since September. In fact, many of us observers were going perplexed as to why earlier in the year the FOMC minutes and Bernanke in his speech would make claims the inflation expectations were stable. <br /><br />You are right that the Fed cannot make a bankrupt household take on more David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-49097810184157251112010-11-01T17:01:18.658-05:002010-11-01T17:01:18.658-05:00Has the Fed not been talking up inflation for two ...Has the Fed not been talking up inflation for two years now? <br /><br />We've seen this movie before. QE did not alter interest rates in the UK, Japan or USA. In fact, all three situations resulted in higher rates at the end of the programs. In addition, all three currencies rallied in trade weighted terms during QE1. Aside from a brief move in markets participants soon realized that MarkSnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-42360956451859935652010-11-01T14:03:41.550-05:002010-11-01T14:03:41.550-05:00Is there some sleight of hand going on do you thin...Is there some sleight of hand going on do you think? All the time the Fed has been talking up expectations of QE2, yet over the last 6 months the Fed's balance sheet has actually shrunk by 3% (it peaked in May).ecbnoreply@blogger.com