Wednesday, August 28, 2013

Destabilising capital flows caused by QE.

An article in today’s Financial Times by Robin Harding draws attention to the destabilising international capital flows that resulted from QE, and claims there is no solution to the problem. He quotes Prof. Helene Rey as saying “it is hopeless to expect the Fed to set policy with other countries in mind…”
 Well actually there is a solution: abandon monetary policy as far as possible as a means of adjusting aggregate demand, as I argued here
So thanks to Robin Harding and the Financial Times for inadvertently supporting my point.

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