I saw this paper, presented by Robert Hall, chairman of the NBER, at the Jackson Hole conference, and I had a momentary hope that there might be some clear thinking from an establishment economist. The reason for hope was the opening sentences of the abstract:

The United States and most other advanced countries are closing on fi ve years of flat-out expansionary monetary policy that has failed in all cases to restore normal conditions of employment and output. These countries have been in liquidity traps, where monetary policies that normally expand the economy by enlarging the monetary base are ine ffectual.

Alas, I then read the rest of the paper which immediately dove into nonsense models based on assumptions that, as usual, ranged from unknowable to provably false. Read “The Assumptions Economists Make” by Jonathan Schlefer for explanation. Needless to say, I was disappointed. Again. Well at least he did notice that QE doesn’t work.

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