Archive for the ‘fiscal policy’ tag
Martin Wolf Says Print More Money
Related to the previous post, the estimable economist Martin Wolf is calling for heading off deflation by printing more money, expanding the money supply, and creating more demand. From this article in the Financial Times:
…if governments need to run deficits, to support demand at a time of private sector weakness, they can always borrow from central banks. Yes, this is “printing money”. It is also an insanely radical policy recommended by no less insane a radical than Milton Friedman, back in 1948. His view was that the government could expand the money supply during recessions and contract it in the subsequent booms. A country with a fiat currency and a floating currency could, thus, stabilise the economy without destabilising credit markets. The neat thing about this proposal is that one does not have to decide whether fiscal policy or monetary policy is doing the heavy lifting: they are two sides of one coin.
I suspect the main opposition to to this approach is coming from those who want to delay the economic recovery until after the November election.
