News
WSJ | Lending Gaps Challenge Central Bank
The European Central Bank's latest interest-rate cut isn't helping the economy as much as it should because of differences in businesses' borrowing costs across the euro zone, a top ECB official said Tuesday.
Bloomberg | ECB Plan Said to Pledge Unlimited, Sterilized Bond-Buying
European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.
Blogs
John Taylor | Strong Push Back at Jackson Hole
Many Fed watchers interpreted the benefit-cost analysis in Ben Bernanke’s speech as signaling more quantitative easing. But viewed in the context of the whole Jackson Hole meeting, which many FOMC members attended, the benefits are considerably smaller than stated in that speech, and perhaps even negative.
WSJ | Two Big Reports This Week for Fed: One Already Bad
As noted in the statement after the Fed’s last policy meeting, central bankers “will closely monitor incoming information on economic and financial developments” before deciding about a third round of quantitative easing.
Coordination Problem | The Unintended Consequences of Ultra Easy Monetary Policy
The variety of economic models used by modern academics and by policymakers give few insights as to how the economy really works. If we accept this ignorance as an undesirable reality, then it would also seem hard to deny the possibility that the policy actions taken in recent years might also have unintended consequences.
