- 11 Dec 2021 07:13
#15201996
MMTers have been publishing peer reviewed papers about these 2 things for 12 years (QE) or 35 years (NAIRU). They got it right from the start.
OTOH, mainstream economists have been ignoring the truth when told by MMTers for all those years.
The Bank of England says, there is no way that QE can cause inflation. I.e. says it in an indirect way.
So, QE is not a form of "printing money". Because it doesn't cause hyperinflation or high inflation.
This is a result from looking at reality. Mainstream economists mostly don't look at reality. They "live" in the fantasy world that they have constructed.
I suppose who work for the BoE and the ECB would have more reason to look at reality.
https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2020/does-quantitative-easing-boost-bank-lending.pdf
http://bilbo.economicoutlook.net/blog/?p=48830
________________________._________________________________
The NAIRU should have been buried decades ago
NAIRU means the Non-Accelerating Inflation Rate of Unemployment, also called natural rate of UE.
By 1983 Mainstream economists had introduced NAIRU. Several progressive economists published peer reviewed papers to show this shift in thinking – away from a commitment to full employment – was based on a lie. The whole NAIRU story was a fraud. They were largely ignored. Other progressive economists were also producing credible research that refuted the main propositions. Some 38 years later, the European Central Bank has produced a research paper which now supports the position progressive economists took back then.
The ECB Working Paper uses OECD data for 29 countries to look at “the dynamics of unemployment (= u) and its natural rate (= u*)”. Here u* is also called the NAIRU. This u* (NAIRU) is, of course, unobservable, being a theoretical construct in mainstream macroeconomics. So it has to be proxied – estimated – from real world data using a range of estimation techniques, however all of them are *deeply* flawed.
The result is that the NAIRU or natural rate of unemployment just rises and falls along with unemployment with some time lag and *slight* rate changes. Both the links below include 1 or many graphs to illustrate how the 2 track along with each other. The blog is much shorter.
Link to paper put out this week by the European Central Bank => https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2625~f013b1096b.en.pdf
Link to Bill's blog => http://bilbo.economicoutlook.net/blog/?p=48837
OTOH, mainstream economists have been ignoring the truth when told by MMTers for all those years.
The Bank of England says, there is no way that QE can cause inflation. I.e. says it in an indirect way.
So, QE is not a form of "printing money". Because it doesn't cause hyperinflation or high inflation.
This is a result from looking at reality. Mainstream economists mostly don't look at reality. They "live" in the fantasy world that they have constructed.
I suppose who work for the BoE and the ECB would have more reason to look at reality.
https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2020/does-quantitative-easing-boost-bank-lending.pdf
http://bilbo.economicoutlook.net/blog/?p=48830
________________________._________________________________
The NAIRU should have been buried decades ago
NAIRU means the Non-Accelerating Inflation Rate of Unemployment, also called natural rate of UE.
By 1983 Mainstream economists had introduced NAIRU. Several progressive economists published peer reviewed papers to show this shift in thinking – away from a commitment to full employment – was based on a lie. The whole NAIRU story was a fraud. They were largely ignored. Other progressive economists were also producing credible research that refuted the main propositions. Some 38 years later, the European Central Bank has produced a research paper which now supports the position progressive economists took back then.
The ECB Working Paper uses OECD data for 29 countries to look at “the dynamics of unemployment (= u) and its natural rate (= u*)”. Here u* is also called the NAIRU. This u* (NAIRU) is, of course, unobservable, being a theoretical construct in mainstream macroeconomics. So it has to be proxied – estimated – from real world data using a range of estimation techniques, however all of them are *deeply* flawed.
The result is that the NAIRU or natural rate of unemployment just rises and falls along with unemployment with some time lag and *slight* rate changes. Both the links below include 1 or many graphs to illustrate how the 2 track along with each other. The blog is much shorter.
Link to paper put out this week by the European Central Bank => https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2625~f013b1096b.en.pdf
Link to Bill's blog => http://bilbo.economicoutlook.net/blog/?p=48837
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