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That's because monetary tools are the wrong tool to generate growth and inflation. The correct tool is fiscal policy, but that's politically impossible at the m

• drjesusphd 8y ago
  I would argue it's only "impossible" for the EU. The US could implement sound fiscal policy, but chooses not to. Whereas the eurozone states suffer a tragedy of the commons unless the fiscal structure of the EU changes.
• netcan 8y ago
  This has become a popular opinion recently because the old proper tools stopped working. The problem is that the institution responsible for inflation doesn't control the state budget, just central bank lending and banking rules. ...and I don't think you can say with any kind of certainty that "new macro," corbynomics or any of the other current ideas will work, are safe, or don't come with other side effects. Personally, I'm not sure there's a constantly true answer. ATM, businesses don't have ways of absorbing more money. You can Google, FB, msft, Amazon or Apple $100m... it probably wouldn't affect what they choose to to in any way. They already have money piling up. Tesla might use the money. They have factories to build, but Tesla's are a rarity. In that market, to get stimulus/inflation, governments need to spend it themselves. In 5 years, it could be different. The problem, imo, with those types of ideas is that public spending is very hard to put in reverse. Even if the value for money sucks, you tend to get trapped spending it.