As Larry Elliott says

The issue is not whether central banks should wean themselves off QE but whether they can do so without bringing to an end the tepid recovery in the global economy.

Quite different from Spudda, who insists that it should never be reversed.

There is also this which is fun:

There were also better ways to boost demand. To an extent QE merely compensated for the fiscal austerity announced by Osborne (and strongly supported by Macpherson).

that is, if we’d not had the austerity we’d have had less QE and still ended up in the same place…..

1 thought on “As Larry Elliott says”

  1. If MV=PT, as has been observed over the long term to hold true, where M=number of pound notes printed, P=inflation, 1/V=people not spending, and T=special sauce, as a policy we have chosen to keep inflation low while people are chosing not to spend.

    The sheer force of mathematics means that because V is getting smaller, and we want P to not get bigger, the only mathematically possible outcome is to increase M – print more beer vouchers.

    And as V gets bigger as people chose to spend, to achieve the same outcome of keeping P small by the same sheer force of mathematics requires M to decrease – destroy beer vouchers.

    The alternative is to allow M to stay static with V dropping, is to reduce T – but I don’t know what T is or how to change it.

    That seems understandable enough to me, but as I tell Tuppence, I’m not an economist, I only did three days of business accountancy, so I could have got this wrong.

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