Market Monetarism and The Future of Monetary Policy with Scott Sumner
Village Global Podcast
00:00
Is the Fed Having the Tools to Prevent Inflation?
The fed has the tools to prevent inflation, no matter how much eresponsibility happens at the fiscal level, or otherwise. The current discussion about the fed perhaps tapering its purchases to morrow is just a proposal that they slow down the rate at which they're expanding reserves system. When interest rates fall close to zero, there's much less a of a velocity of circulation. Money tends to sit there as reserves and not get spent as it would if interest rates were positive.
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