Monetary Policy Archives - Page 6 of 8

The distinction between monetary and fiscal policy

3rd April 2016

Helicopter Money, Monetary Policy, Money in Europe

Policies which have fiscal effects are not necessarily fiscal policy. To believe otherwise is a fallacy. The distinction between fiscal and monetary policy is rarely, if ever, made clear by economists of an...

Nothing is permanent

Eric Lonergan

5th March 2016

Monetary Policy, Theory & Other Problems

14

To borrow a disparaging phrase from Paul Krugman, the concept of 'permanence' in economics seems “to have a special ability to create intellectual confusion, even in smart people.” Personally, I don't reall...

The BoJ has started helicopter drops

Eric Lonergan

26th February 2016

Definitions of Money, Finance & Asset Pricing, Helicopter Money, Monetary Policy

27

Oddly, some economists think that helicopter drops are either beyond the capacity of central banks or highly unlikely. Neither is true - they have already started. It is now clear that the Bank of Japan is e...

Legal helicopter drops in the Eurozone

Eric Lonergan

24th February 2016

Helicopter Money, Monetary Policy, Money in Europe

16

Helicopter drops in the Eurozone may be a legal obligation of the European Central Bank (ECB). The laws governing the ECB are extremely clear, and repeat three features which policy must comply with: 1. T...

There is a lot more the ECB can do

Eric Lonergan

23rd February 2016

Monetary Policy, Money in Europe

2

So far, the debate on negative interest rates completely misses the point. If the private sector could borrow at long maturities at negative interest rates, banks could be profitable, and savers didn't experien...

Debt-free money: A brief reply to Randall Wray

Eric Lonergan

16th February 2016

Definitions of Money, Monetary Policy

26

L. Randall Wray is exercised by my suggestion that he has engaged in semantic sleight-of-hand. To summarise my argument: it is an obvious fact that a ten dollar bill is not a debt - because the issuer owes the...

Negative interest rates don’t work

Eric Lonergan

27th November 2015

Definitions of Money, Monetary Policy, Theory & Other Problems

12

I have argued that economists should be very wary about advocating steeply negative nominal interest rates. This is a case of basing policy on models which assume what they need to prove. If we assume that cha...

Tobin & the end of banking

Eric Lonergan

9th October 2015

Definitions of Money, Finance & Asset Pricing, Monetary Policy, Theory & Other Problems

21

I'm writing about this subject with some trepidation. Many economists who have entered the fray have made fools of themselves; and many who triumphantly point out their errors usually go on to make some of thei...

The effects of negative interest rates. A brief reply to Miles Kimball

Eric Lonergan

3rd October 2015

Definitions of Money, Monetary Policy, Money in Europe

2

Miles Kimball has developed a very intriguing idea. He wants there to be an exchange rate between physical cash and electronic money (deposits) and a steeply negative interest rate on deposits to stimulate spen...

Cashless dreams … Or nightmares?

Eric Lonergan

24th September 2015

Helicopter Money, Media, Monetary Policy, Money in Europe

3

Martin Sandbu wittily suggests that advocates of competing contingency plans for central banks resemble Pythonesque political factions. He thinks a compromise could be a marriage made in heaven. But as a paid u...

The distinction between monetary and fiscal policy

Nothing is permanent

The BoJ has started helicopter drops

Legal helicopter drops in the Eurozone

There is a lot more the ECB can do

Debt-free money: A brief reply to Randall Wray

Negative interest rates don’t work

Tobin & the end of banking

The effects of negative interest rates. A brief reply to Miles Kimball

Cashless dreams … Or nightmares?

Reviews of Eric’s book

CNBC: market sell-off is ‘noise’

Monetary policy & babysitting: why rates are so low, and ‘what’s next?’