Mike Whitney — The Biggest Heist in Human History

Consequences of monetary versus fiscal policy — asset appreciation versus economic stimulus, enriching asset owners but leaving workers out in the cold. Monetarism versus Keynesianism.

Counterpunch
The Biggest Heist in Human History
Mike Whitney

Gaius Publius — "Yes Virginia, all that money printing did show up as inflation"

"They" have already anticipated that. Assets don't "inflate," they "appreciate." Over-appreciation with respect to underlying value is a "bubble" rather than "inflation," and asset bubbles are self-correcting in markets.

It's all in getting the terminology right.

Actually, an intention of QE was for risky assets to appreciate, thereby creating a wealth effect that was supposed to increase spending and demand for goods and services, leading to increased investment and hiring. Didn't happen that way.

Hullabaloo
"Yes Virginia, all that money printing did show up as inflation"
Gaius Publius

Lord Keynes — Austrians and the Definition of “Inflation”

Certain Austrians are running to defend their idiosyncratic definition of “inflation” as an increase in the money supply, instead of (as people normally use it) a general increase in prices.

Social Democracy For The 21St Century: A Post Keynesian Perspective
Austrians and the Definition of “Inflation”
Lord Keynes

My view is that the term "inflation" is ambiguous and also charged with connotation as to obscure the denotation, whether by technical definition or use in ordinary language contexts. Therefore, "inflation" should be relegated to the dustbin of history as archaic and no longer useful in current discourse.

Lee Adler — Here’s Why “QE Isn’t Money Printing and Does Not Cause Inflation” Are Not Only Big Fat Lies, But Red Herrings

Adler points out that QE results in asset price appreciation that likely would not have occurred otherwise and it constitutes "inflation" that is not measured by standard measures such as price indexing and wage increases.

The Fed has admitted that an aim of QE was to raise asset prices to increase the wealth effect and thereby stimulate the economy through increased spending based on it. The Fed also admitted that this was "asset inflation, in that it resulted in asset prices higher than they would have been otherwise. In other words, blowing more bubbles.

This criticism is a loose use of "inflation," which is technically defined in economics as a continuous rise in the general price level, and it fails to understand the implications of monetary policy and fiscal policy. But the fact is that the Fed wanted to create inflationary expectations to boost asset prices and it succeeded apparently because a lot of people fell for it.

The Wall Street Examiner
Here’s Why “QE Isn’t Money Printing and Does Not Cause Inflation” Are Not Only Big Fat Lies, But Red Herrings
Lee Adler

Frances Coppola — Inflation, deflation and QE

From where I stand, QE looks like a very bad bet indeed. The benefits are uncertain and the downside risks huge. In my view it should be stopped. But you may not agree - and I know that many people are much more positive about QE. If you believe that overall its effects are beneficial to the economy, please do comment. Or even submit a post of your own arguing the opposite case.

And here is a final thought. It's all very well criticising QE, but what should we do instead? After all, we have stagnant economies, damaged banks, risk-averse corporates, highly-indebted households, high unemployment, under-employment, low productivity and falling real incomes. Doing nothing is not an option. If QE is a disaster, what is the alternative?

Warren Mosler said from the get-go that QE had a deflationary bias through the interest income channel, and MMT as a macro theory that resolves the trifecta of growth (production and productivity), employment, and price stability provides a complete solution to the crisis, chiefly through fiscal policy using the sectoral balance approach, functional finance, and the MMT JG, as well as proposals for reforming the financial system and economic policy that the led to the crisis.

Coppola Comment
Inflation, deflation and QE
Frances Coppola