By now, you probably have seen this little project from the WSJ — but on the off chance you haven’t, have some fun!

 

click to play
Use space bar to generate Monetary Stimulus!
federator
Source: WSJ

 

Hat tip Panzner!

Category: Digital Media, Federal Reserve, Humor

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “The Federator”

  1. noncist says:

    That’s cute,

    I was able to keep average unemployment at 5% with 2.6% inflation, but I still only got two stars – I guess with a dual mandate there’s no way to truly win?

    Nevermind, a couple more tries and I got 3 stars with 2.3% inflation and 5% unemployment. The trick is to use ’rounds’ of QE to keep growth volatile but high on average.

  2. beaufou says:

    So many wrongs

  3. d4winds says:

    The game’s conclusion–dollars everywhere on the streets–is enormously misleading in 2 respects: (1). Prior to QE, there was in a lteral fact, a true helicopter drop of trillions onto Wall Street, specifically to its bondholders, stockholders, and bonus pool recipients in the form of direct transfers and of asset-guarantees. Due to this helicopter drop, the Fed instituted, beginning in Aug ’08, a new, heretofore-unheard-of policy: banks were paid interest on their reserves to give them incentive not to loan out the reserves, which would expand the money stock commensurate with the lending. The Fed did this to limit any monetary expansion effects from the huge increase in its own balance sheet. The limiting effect on monetary expansion worked wonderfully, even better than hoped. Subsequently, the Fed has had different QE rounds, all under the same interest-on-reserves-to-limit-money-creation regime. Consequently, (2) QE and the original helicopter drop have had virtually no effect beyond ordinary secular trend in the growth of M2, despite the large increase in bank excess reserves. Money has not being lying around on Main streets. Very little–if any– beyond the secular norm has been created. The banks, however, now have reserves which are de facto bonds with interest paid by the Fed. QE has not been a typical open market operation since its effects have been largely limited to lowering interest rates on its explicit targets (MBS, eg) along with requisite second order portfolio substitution. The the side effect has been to give bankers a Fed-guaranteed annuity without the necessity of taking any loan-risk. There has been no excessive money-creation to pump-up asset prices on non-targeted markets such as equities, houses, etc. FYI, the original helicopter drop to the banks was actually a twofer: the original one and the new annuity. At some point it would be nice if the financial press would actually take note of the facts.

  4. AtlasRocked says:

    Pritchard says they were right: “It is not liquidity management as claimed so vehemently at the outset. It really is the same as printing money.”

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9970294/Helicopter-QE-will-never-be-reversed.html

  5. Petey Wheatstraw says:

    WTF? No Princess?