The Real Targets Should Be Nominal Targets
James Alexander | At first glance the abstract of this brand new research piece, The Macroeconomic Risks of Undesirably Low Inflation, from the Federal Reserve Board sounds rather dry and innocuous.
ZLB
0.5% annual CPI UK inflation. Good news?
BRISTOL | Guest post by Tony Yates (Long and Variable) | That’s what George Osborne’s twitter feed would have you believe. And it was echoed by Andrew Sentance. Statements like these are at odds with modern monetary macro, and they are pretty irresponsible.
Is Krugman Right About the U.S. in a Liquidity Trap?
MADRID | By Luis Arroyo | It is possible, as we have seen over the past few years, that no matter how much the Central Banks increase their money emissions, it won’t change people’s preference for liquidity. It isn’t clear that an increase in banking credit will swell investment either, especially if investors own a higher than normal debt stock and if they don’t see a clear future profitability. The same applies to families.