Eli Dourado

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What monetary stimulus?

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What monetary stimulus?

Eli Dourado
Dec 12, 2010
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What monetary stimulus?

www.elidourado.com

I was chatting with a friend about the state of the economy, and I brought up how the monetary expansion that began in 2008 wasn’t actually stimulative because the Fed started paying interest on excess reserves. My friend expressed a little skepticism that excess reserves mirrored the monetary expansion one-for-one. But behold:

No, it’s not literally one-for-one, but it’s close. Non-circulating money gives me the vague impression of a tree falling in the woods with no one around to hear it.

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What monetary stimulus?

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