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> "printing money does not cause inflation." How would that be possible? I haven't read this particular article, but I've read elsewhere that traditional tools

> "printing money does not cause inflation." How would that be possible? I haven't read this particular article, but I've read elsewhere that traditional tools used by central banks to increase inflation are being observed to empirically no longer work. I understand many of these techniques are analogous to "printing money" in a controlled way. That points to failures in their models of the economy and of inflation. I also think I've read that at least some of the reason for this may be higher than expected levels monopoly-type powers active in the economy that conspire to keep prices and wages, and therefore inflation, down. My recollection is hazier on this part. Edit: this might be the article I was thinking of: Are Superstar Firms and Amazon Effects Reshaping the Economy?: The biggest companies may be influencing things like inflation and wage growth, possibly at the expense of central bankers’ power to do so. https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html https://www.nytimes.com/2018/08/25/upshot/big-corporations-i... > Two of the most important economic facts of the last few decades are that more industries are being dominated by a handful of extraordinarily successful companies and that wages, inflation and growth have remained stubbornly low. > Many of the world’s most powerful economic policymakers are now taking seriously the possibility that the first of those facts is a cause of the second — and that the growing concentration of corporate power has confounded the efforts of central banks to keep economies healthy. > Mainstream economists are discussing questions like whether “monopsony” — the outsize power of a few consolidated employers — is part of the problem of low wage growth. They are looking at whether the “superstar firms” that dominate many leading industries are responsible for sluggish investment spending. And they’re exploring whether there is an “Amazon Effect” in which fast-changing pricing algorithms by the online retailer and its rivals mean bigger swings in inflation.

throw0101a 7y ago
> I haven't read this particular article, but I've read elsewhere that traditional tools used by central banks to increase inflation are being observed to empirically no longer work. I understand many of these techniques are analogous to "printing money" in a controlled way. There are circumstances where printing money does increase inflation.... and circumstances where it does not: > When short-term interest rates reach zero, further monetary easing becomes difficult and may require unconventional monetary policy, such as large-scale asset purchases (quantitative easing). * https://www.brookings.edu/blog/ben-bernanke/2017/04/12/how-big-a-problem-is-the-zero-lower-bound-on-interest-rates/ https://www.brookings.edu/blog/ben-bernanke/2017/04/12/how-b... * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound It should be noted that central banks are not omnipotent: they do have some influence, but they do not have all the influence. When governments enact austerity, which depresses demand and economic activity, thus reducing inflationary tendencies, they are working at cross-purposes to the central banks. After the Great Recession we saw central bankers cut rates, but governments cut spending, thus the two cancelling each other out to a certain extent.

throw0101a 7y ago

> I haven't read this particular article, but I've read elsewhere that traditional tools used by central banks to increase inflation are being observed to empirically no longer work. I understand many of these techniques are analogous to "printing money" in a controlled way. There are circumstances where printing money does increase inflation.... and circumstances where it does not: > When short-term interest rates reach zero, further monetary easing becomes difficult and may require unconventional monetary policy, such as large-scale asset purchases (quantitative easing). * https://www.brookings.edu/blog/ben-bernanke/2017/04/12/how-big-a-problem-is-the-zero-lower-bound-on-interest-rates/ https://www.brookings.edu/blog/ben-bernanke/2017/04/12/how-b... * https://en.wikipedia.org/wiki/Zero_lower_bound https://en.wikipedia.org/wiki/Zero_lower_bound It should be noted that central banks are not omnipotent: they do have some influence, but they do not have all the influence. When governments enact austerity, which depresses demand and economic activity, thus reducing inflationary tendencies, they are working at cross-purposes to the central banks. After the Great Recession we saw central bankers cut rates, but governments cut spending, thus the two cancelling each other out to a certain extent.