Henry Curr on the Myths and Uncomfortable Truths about QE
Macro Musings with David Beckworth
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What Exactly Is Ce Funding the Government?
Central banks do not explain clearly how they decide what quantity of bonds to bu ie. So we don't know, and central bankers don't know. Myth number two is that loose monetary policy benefits the government. It's just changing the make up of those liabilities. Those central bank reserves bear interest costs. If interust rates derise, shoretim nterest rates to rise, many central banks would implement that by raising the interest paid on reserves. That would carry a cost to the central bank, a fiscal cost that would mean lower profits remitted to the government by the central bank. And if an extreme situation, could mean the central bank making losses and eroding the central banks
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