The post stems from a comment about low inflation in Europe and the inability of central bank officials to take responsibility for the effects of their policies. Lars Christensen covers the same point today.For you math jocks, here is a mathematical translation of the absurdity:NGDP = M*V
NGDP = C + I + G + NXIncreases in the money supply obviously cannot boost NGDP, because the real problem is excessively low consumption, investment, government spending, and net exports. Don't think top government officials would ever be so blind as to think this way? Think again.PS. Here's the equation that they should put in principles textbooks:M*V = C + I + G + NXIt will never happen---as it might get students thinking dangerous thoughts.
Tuesday, July 15, 2014
Sumner and Christensen Harangue Incompetent Technocrats
At EconLog, Scott Sumner is being witty. Not only did he title his post, Governments don't create problems, they solve them. He closes with this: