Use QE to fund spending to address the cost of living and continuing Covid crises, quite legitimately.
– Tell the Bank of England to hold or even cut interest rates.
Print money and cut interest rates. Why, Hello there Mr. Erdogan!
Use QE to fund spending to address the cost of living and continuing Covid crises, quite legitimately.
– Tell the Bank of England to hold or even cut interest rates.
Print money and cut interest rates. Why, Hello there Mr. Erdogan!
Easy – you just need to add the right mixture of price controls and subsidies. With the right fat controller in charge it will be just fine!
This from an earlier post on MMT:
Bill Lane says:
October 23 2022 at 2:16 pm
If you roll them over… let’s assume holders want their money back and not gilts in lieu. Assuming new buyers can’t be found then it is Government money. Then repayment or rollover becomes the same thing. New buyers will obviously only buy if interest rates are high and attractive.
Richard Murphy says:
October 23 2022 at 4:34 pm
Look at 320 years of experience and stop being silly
And rates will be falling soon the world over soon – even markets have priced that
Bill Lane says:
October 23 2022 at 4:49 pm
“Look at 320 years of experience and stop being silly”
That’s not an answer. Out of those 320 years how many years have bond yields been manipulated by central banks through QE. More so how many years have we had yield suppression together with inflation? It is dangerous to share your arrogance that demand will exist in any material size for Govt bonds offering big negative real rates of interest.
Richard Murphy says:
October 23 2022 at 9:50 pm
1) you are a troll
2) you clearly do not understand open market operations
To be fair bond owners are historically people quite happy with losing money. Just, usually, more slowly than they did a couple of weeks ago.
@BiFR
bond owners are historically people quite happy with losing other people’s money
FTFY
Hey Tim did you see Mervyn King trashing your profession on live TV on Sunday? Blaming economists for having given support to the BoE in its constant money printing exploits from 2009 onwards?
It seems its not just random nutters like me having a go now, even former Governors of the BoE also seem to think that the utterings of economists aren’t only useless but also actively dangerous……..
It seems that whoever is in office, we’re up the creek.
Serious Q Tim, what would your prescription be to avoid stagflation?
Serious answer. As ever, bugger the macroeconomics. Get the microeconomics right – the incentives, the market structures – and leave well be. Allow fracking, kill at least 50% of all regulation, blow up the green belt and etc and so on. The green belt idea would actually work too. It’s what pulled Britain out of the 1930s shite too – unregulated private sector housebuilding.
. . . the utterings of economists aren’t only useless but also actively dangerous……..
Dunno, Jim, that’s like saying the work of farmers is useless and actively dangerous because some of them misuse land and cause flooding. Farming and economics are tents wide enough for idiots and geniuses to squeeze in.
And it’s a bit much for a governor of the Bank of England to say big boys made him do it.
It’s what pulled Britain out of the 1930s shite too – unregulated private sector housebuilding.
That was part of it, but it didn’t occur in isolation and couldn’t have. There was a cheap money approach by H.M. Govt. – Sterling devaluation, very low interest rates and expansionary monetary policy with acceptance of some inflation. The nature of the previous downturns meant that there was no reluctance to provide credit, so mortgages were easy to come by. Cheap money made construction costs low.
Just removing restrictions on planning might not give you the boom you hope for.
Tim, thanks. PJF, yes combined with real cuts in Govt spending.
. . . combined with real cuts in Govt spending.
Maybe, yes and no, Jonathan. There were serious cuts in the 20s and up to 1931, so the new National government might not have had much left to cut in the boom years from 32. So cuts made a difference, but they’d already happened. It didn’t take long for Britain to start re-arming so government spending was definitely up by 1936.
To be clear, I’m not advocating general Keynesianism or Abenomics, but we should be open minded that some medicines are appropriate to some conditions.
And I’m certainly up for some Singaporian development of the cities; go right ahead with the giant towers of private apartments. Start with Islington.
Good answers to how to avoid stagflation, but we’re not in the government. What would be your prescription to /survive/ stagflation as a middle-aged middle-of-the-road ordinary pleb?