George Selgin on Average Inflation Targeting and *The Menace of Fiscal QE*
Macro Musings with David Beckworth
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Is the Fed Trying to Exceed Inflation Targets?
In an ordinary, orthodox floor system, it would be the same balance sheet expansion in such a system itself doesn't affect a spending very much. So with a floor system, there's always a capacity for cue, non inflationary cue. And in that case, the fed doesn't have the ability to say, we can't pay for all these grams by expanding our balance sheet, cause we'll miss our inflation target. The only exception was in a crisis like two thousand eight rates. For it, there's zero lower bound. It's precisely then quantitative easing becomes a useful macreconomic tool because it doesn't lead to inflation of the same kind.
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