Category: Think Tank

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.

One Response to “Evaluating Unconventional Monetary Policies ─ Why Aren’t They More Effective?”

  1. DeDude says:

    “Our model predicts that when inflation is fully anchored, LSAP can lower the real interest rate on both public and private debt and raise the collateral value of productive capital, thus increasing the number of borrowers and the aggregate quantity of debt. However, unless the extent of asset purchases is extremely large and highly persistent, CE through LSAP cannot effectively ofset the negative impact of a financial crisis on aggregate output and employment. The main reason is that LSAP per se do not improve the allocative efficiency of credits or the productivity of debtors. By lowering the costs of borrowing and the rate of return on savings, LSAP can stimulate aggregate investment mainly by “pushing” creditors”

    Yes the best you can hope for is that some fool starts a project that (s)he should not have started because it makes no business sense. But even worse, without increased money for consumption the best you can hope for if this fool actually have success is that (s)he takes away costumers from someone else. So the growth created is countered by a similar slump created by taking away consumer $ from someone else.