Nothing is permanent
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
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
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
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
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
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
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
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?
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...
Abolishing cash: a short reply to Martin Sandbu
Martin Sandbu has written a typically measured and thoughtful response to Andy Haldane's reflections on abolishing cash and setting negative interest rates.
On the substantive point - that Haldane has ommitt...