Rarely do we approve of bankers here at Demand Side. As close as we come is William White, former chief of the Monetary and Economics Department at the Bank for International Settlements, currently a key adviser to the OECD. We promised a couple of weeks ago we'd have him on, and today's relay is fulfillment.
White wrote the paper "Ultra-Easy Monetary Policy and the Law of Unintended Consequences" just prior to the Jackson Hole Conference, which basically upstaged all the discussion there. We've linked to the paper on the blog. Or just Google "Ultra-Easy Monetary Policy."
William R. White
"Ultra-Easy Monetary Policy and the Law of Unintended Consequences"
(Revised September 2012)
We don't agree with White completely, surprise. In particular, his fear of inflation absent a recovery is Friedmanesque. But we do see a clear and direct look, and what is seen by him is pretty close to what others have seen who indulge in such an exercise: An unsustainable debt, the vulnerability of banks, and the need for creditors to take a hit, among other things.
A couple of terminology notes. When White talks about "macro instruments" he is talking about central bank efforts to increase private spending and borrowing. And "risible," the word "risible," means arousing or provoking laughter. "Laughable."
This is courtesy of Bloomberg on the Economy. Edited but not distorted.