What a lovely sunny day. I had a great time sitting at sea and thinking about monetary policy lol Yeah, I am addicted.
The monetary policy recently is not so effective as it should be. Sooner or later it will be modernized. That’s a normal phase of world economy evolution.
Governments manage their economies through central banks and interest rates. Many economists offer so-called MMT. System to manage the economy through spending and taxes, as changes in interest rates are not able to stimulate the economy enough at the moment. There are many famous supporters of this idea – Bernanke, Yellen and Ray Dalio. There are some talks even about using “helicopter money.”
In both cases, money is printed by central banks. But QE (quantitive easing) means using this money to buy assets, and that reflects on a balance sheet. While ‘helicopter money’ suppose money giving away to the public to increase spending and stimulate the economy this way. I think managing the economy through spending and taxes make sense and in theory, should work. But I can’t imagine how it should be regulated. Seriously guys, its good idea, but seems to be a utopia. Officials and political elite will get the opportunity to influence money distribution – a golden age for corruption (especially in some countries).
Monetary policy should be and will be modernized. But the main question is how to make it not only effective but transparent. None of offered by economists theories answers.
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