Andrew Bailey’s confusion over inflation is a worrisome precedent for policy-making Juan Castañeda The Bank of England’s Monetary Policy Committee (MPC) will meet again next week to assess inflation. In the last two years the Bank’s inflation forecast has proven systematically wrong, showing a fundamental error in the models and rationale used. In a conference hosted by the Austrian national central bank last month, the Governor of the [...]
When did central banks decide that abnormal monetary growth doesn’t matter anymore? With many countries’ economies still suffering from the effects of the coronavirus pandemic, or even — as in the UK — still under large-scale lockdown, another fall in spending and output in the autumn is expected. Worryingly, policymakers around the world only seem to be concerned about the short-term impact of the lockdowns, and appear [...]
Watch out for too much money — and the return of boom and bust cycles Money is growing at record rates in peace time the US, at least by modern standards. The quantity of money in the US (as measured by M3) rose by 7.5 per cent in April 2020. With further strong money growth in May, the annual rate of growth of money has shot up to a shocking [...]
Interest rates aren’t central banks’ only ammunition to defend against recession November 12, 2019 Monday’s GDP figures were a mixed bag: the UK has narrowly avoided slipping into recession, but with growth at its lowest rate since 2010, the country is far from being out of the woods. Nor is this just a British issue. Increasing numbers of economic commentators are sounding the alarm about a potential recession in [...]
