tag:blogger.com,1999:blog-2761684730989137546.post4015728709570708017..comments2024-03-28T20:28:01.733-04:00Comments on Mike Norman Economics: Bill Mitchell — Helicopter money is a fiscal operation and is not inherently inflationarymike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2761684730989137546.post-21939791543723944962016-09-07T13:23:59.631-04:002016-09-07T13:23:59.631-04:00I agree with you and if the purpose was to inflate...<i>I agree with you and if the purpose was to inflate asset prices it worked.</i><br /><br />The way that BB had expected, though. He aimed at increasing asset price level to produce a "wealth effect" that would spur spending without bank lending or increasing the fiscal deficit. The "wealth effect" didn't pan out as hoped.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-18648346957984706702016-09-07T13:19:27.231-04:002016-09-07T13:19:27.231-04:00I agree with you and if the purpose was to inflate...I agree with you and if the purpose was to inflate asset prices it worked.Anonymoushttps://www.blogger.com/profile/00952210635254985221noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-69927411950471888082016-09-07T12:19:37.078-04:002016-09-07T12:19:37.078-04:00Many times Bill Mitchell has said quantitative eas...<i>Many times Bill Mitchell has said quantitative easing, "was introduced on the false premise that banks were not lending because they had insufficient reserves." But, as I recall QE was done to re-inflate asset prices in order to bail out the banks on the premise that economy would fail without the banks. Which claim is correct? Bernanke had to have understood how the system works and that increasing reserves wouldn't have increased lending.</i><br /><br />There were three stages of QE preceded by Fed intervention to provide emergency liquidity on an as needed basis before QE. I would dis regard what the authors put forward by way of explanation. That's designed to influence behavior. IN my view QE was chiefly about supporting asset prices, in particular housing.<br /><br />As I recall reading that piece, I think he was thinking of passing out cash (Friedman's helicopter money) as being the same as the cb crediting bank accounts. I think where the issue arises is the way the phrase "printing money" is used. HM and QE are both seen as "printing money."<br />Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-23379335665807691862016-09-07T06:59:13.678-04:002016-09-07T06:59:13.678-04:00Tom Hickey: Many times Bill Mitchell has said qua...Tom Hickey: Many times Bill Mitchell has said quantitative easing, "was introduced on the false premise that banks were not lending because they had insufficient reserves." But, as I recall QE was done to re-inflate asset prices in order to bail out the banks on the premise that economy would fail without the banks. Which claim is correct? Bernanke had to have understood how the system works and that increasing reserves wouldn't have increased lending.<br />Also, I read " The Unavoidable Costs of Helicopter Money " and I didn't get the sense that the author was equating QE with helicopter drops. I thought that he was comparing the two. I would like to know your interpretation. Anonymoushttps://www.blogger.com/profile/00952210635254985221noreply@blogger.com