Post ATPsyZeuqXZnCK7Icy by artsrc@aus.social
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 (DIR) Post #ATOlixGqOgYwxRVDjE by johnquiggin@mstdn.social
       2023-03-08T07:21:31Z
       
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       I've repeatedly argued that a 2-3 per cent inflation target guarantees regular visits to the Zero Lower Bound, and hence repeated resort to Quantitative Easing, which most people think is had. But I've had neither any impact nor (IIRC) any response from #econtwitter. Thoughts?
       
 (DIR) Post #ATPsyZeuqXZnCK7Icy by artsrc@aus.social
       2023-03-08T20:17:26Z
       
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       @johnquiggin Recent experience shows the costs of monetary policy.  Low rates increase leverage and amplify financial risks.  Rapid increases in rates cause highly concentrated financial stress for new borrowers.We also the weakness of conventional monetary policy pre-covid.  Rates were low over the decade around the world.  Economies were stagnant, with low growth, low inflation, low wage growth, and stagnant labour under utilization.By contrast we say the power of fiscal policy.  We had a rapid recovery but, also inflationary pressures.Rather than focusing on the tool that does not work, monetary policy, strengthening the tool that does, fiscal policy, makes much more sense.