MMT-friendly. Mentions TPC, Paul McCulley, and, implicitly, policy space and making room for non-government saving desire.
The Financial Times | FT Alphaville
On the transient necessity of central bank independence
Izabella Kaminska
The Financial Times | FT Alphaville
(h/t Andy Blatchford)
2 comments:
In the face of inflation, which is often associated with excessive monetization of government debt...
What does someone like Bernanke mean when he refers to "excessive monetization of government debt?"
What does someone like Bernanke mean when he refers to "excessive monetization of government debt?"
The cb exchanging Treasury liabilities (tsys) for its own liabilties (rb). It runs afoul of the first commandment of modern central banking that the cb not lend to the Treasury. A cb's exchanging rb for tsys even in the market is seen as backdoor lending to Treasury.
What they don't get is that OMO and POMO are liquidity operations and not fiscal ones, although when all is said and done this is ultimately an untenable distinction. The point of the cb in addition to running the payments system and setting the interest rate is facilitating govt spending as the govt's bank.
Post a Comment