144 – Peter Stella on Debt, Safe Assets, and Central Bank Operations
Macro Musings with David Beckworth
00:00
The Pros and Cons of Bank Reserves
In normal times, you don't need the FOMC to understand exactly how the plumbing works. They can do their job and captain the ship without knowing how the boiler and the ship works until the plumbing breaks. And then suddenly you can have a problem because people have these mental models of how the world works and they're actually wrong. You're making policy decisions based on a false model.
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