Tuesday, September 16, 2014

Andrea Terzi — Searching hard for Taylor’s inflation

In February 2011, I was in the audience of a lecture given by John Taylor on the “exit strategy”. One main theme was that the policy of the Fed called “Quantitative Easing” meant a high risk of monetization and inflation, if not hyper-inflation, in the U.S. economy. In the Q&A session, I asked Professor Taylor why he thought that “monetization” is inflationary. I argued that Quantitative Easing boils down to portfolio shifts in banks’ balance sheets, and that asset reallocation does not seem to be causing an increase in demand, nor a price increase. His answer (that I quickly noted in every detail on a piece of paper) was:…
Any day now. We have a model. :)

Money And The Real Economy
Searching hard for Taylor’s inflation
Andrea Terzi, Professor of Economics, Franklin College, Switzerland

3 comments:

John Zelnicker said...

Tom -- No link.

Unknown said...

http://www.ateconomics.com/2014/09/16/searching-hard-for-taylors-inflation/

Tom Hickey said...

Thanks, John. Fixed now.