I’m a hardcore pessimist on the euro-area — perhaps because I’ve spent too much time on the Great Depression. As the saying goes, give a person a hammer, and everything looks like a nail. But I’ll concede one thing: if de-coupling is real (and I am sure it is), then the eurozone story makes a bit […]
Monthly Archives: August 2013
How not to do ‘forward guidance’
What is the only option for a central bank up against the ‘zero lower bound’ (i.e. the policy interest rate has been set to zero) and whose asset purchases (‘quantitative easing’) have little traction? Answer: inflation expectations. The whole point is that, for better or worse (largely for worse), monetary policy has been given the […]