Posted by WARREN MOSLER on February 28th, 2011
Recent statements regarding QE show at least some key Central Bankers have it right:
Don Kohn (Former FRB Vice Chair):”I know of no model that shows a transmission from bank reserves to inflation”.
Vitor Constancio (ECB Vice President): “The level of bank reserves hardly figures in banks lending decisions; the supply of credit outstanding is determined by banks’ perceptions of risk/reward trade-offs and demand for credit”.
Charlie Bean (Deputy Governor BOE): in response to a question about the famous Milton Friedman quote “Inflation is always and everywhere a monetary phenomenon”: “Inflation is not always and everywhere a monetary base phenomenon”: