Regardless of Edmund Conway’s contempt* for the publication, I actually really enjoy the Bank’s Quarterly Inflation Report. Like many of their speeches etc, it is quite informative, and useful for explaining how they think. Some quotes:
The Bank’s asset purchases have injected money into the economy, raising the prices of a range of assets and improving companies’ access to capital markets. Nevertheless, spending growth remains weak . . . One reason why money growth has been subdued is that some households and companies have paid down debt instead of keeping that money on deposit.
Funny, the Bank’s explanatory leaflet says “Putting more money into our economy to boost spending“. Lots more there.
Then there’s Chris’s excellent post on Capital. This touches some important issues that Duncan had earlier raised. Why is there not more capital investment when there are evidently many opportunities? Which means I now have to read something by some people called Marglin and Bhaduri, cheers Chris.
Stefan Karlsson, a bit of an arch-monetarist, nevertheless comes down against the Sumner Solution to getting Inflation:
Sumner disagrees. He seems to think that the Fed can and should target inflation, or more accurately nominal GDP (NGDP) growth . . . I don’t think one of Sumner’s proposed actions for creating inflation and therefore by extension higher NGDP growth, namely raising inflationary expectations, will really be that effective. Almost all market participants already know that the Fed wants inflation to return (specifically to about 2%), and are doing what they believe will be effective to create it. Announcing that target formally won’t make any difference.
That is where I think we are in the UK. The statement ‘look we’re trying for 2% inflation’ does nothing to boost growth, because that’s about where we are. But Sumner could quite rightly come back with: target NGDP growth instead. I am beginning to agree with him, on that subject.
For the doom-mongers, repossesssion figures are going to disappoint. Like unemployment figures, coming in much better than expected. The Conservatives should be secretly quite happy with these aspects of their presumed inheritance.
The normally sound Don Paskini gives us the totally unhelpful information on whatthe PUBLIC think should be used to solve financial crises. Next week, we will give you the polling data on how they want cancer to be cured: through drugs, invasive surgery or holistic bee wax therapy? You decide. Because democracy is always such a good way of solving technical systemic problems.
Except the question of redistibuting wealth, which is political. But then, most people are below the mean, so the answer is always yes . . .
This post, and the experiments that have led from it, have made me laugh really hard today. Try typing in “Is it OK to” in your Google toolbar.
*actually, his analysis is worth reading