Joe Weisenthal calls it the Biggest Myth in Monetary Policy Today, and recently there’s been a wave of posts about it. Would another round of expansionary monetary policy at this point – in either a QE3, a conditional higher inflation target or NGDP targeting – primarily benefit the financial sector, rentiers and the wealthy?
Here are Daron Acemoglu and Simon Johnson at Economix, making the case in Who Captured the Fed?:
Thus was born the idea of independent central bankers, steering the monetary ship purely on the basis of disinterested, objective and scientific analysis. When inflation is too high, they are supposed to raise interest rates. When…
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