
Henry Curr on the Myths and Uncomfortable Truths about QE
Macro Musings with David Beckworth
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How Much Ce Affects Interest?
Nobody knows how much ce affects interest. Central bankers are, to a certain extent, flying blind when they use ce and when they determine how much to buy. It's not as precise as determining what interest rate to set. And i'm not sure anyone really believes that portfolio balance effects are holding down the ten year by 200 basis points. If that's true, that's faily sort of astonishing. But central banks are sort of doing it, i think, because they want to throw everything at the wall and see what sticks. The bang for buckes is really uncertain. So if you're going to have a very clear effect on policy makers trying to determine how much money to buy,
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