1/ Amazing thread, h/t @MartyBent @parkeralewis.
I want to add that in my prior (relatively shallow) research of monetary policies in history, I’ve seen the seeds of doubt raised within the ranks of the central bankers themselves.https://twitter.com/MartyBent/status/1028366607796592640 …
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2/ Centrally-managed monetary policies, even if _met_ (e.g.: commonly accepted 2% inflation target), might not actually be a good thing. Below I include a few quotes from Masaaki Shirakawa, the previous (30th) Governor of the Bank of Japan, September 2013.
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3/ "Success creates its own problems" - mused Shirakawa. "Success" here implies successful inflation targeting. He looks at Japan's Lost Decade(s) & economies in the 2000s as empirical evidence.pic.twitter.com/F6Z1vSQVoY
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4/ Shirakawa gives 2 reasons for such a contradiction between practice & theory: (a) price stability plus high growth tend to lead to bubble conditions and (b) price stability tends to justify prolonged monetary easing, which in turn exacerbate the bubbles.pic.twitter.com/XrQct0G5Hc
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5/ Here it is in his own words, an extremely influential central banker: "we have to admit that central banks that have accommodated asset price bubbles *failed to achieve economic stability*" Regardless of what you think of central bankers, admitting this is quite brave!pic.twitter.com/TtBMiL9Uod
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6/ Here he is again, clearly admitting there there is an inherent conflict & something very wrong in the currently accepted monetary policies of the world: "this position is no longer tenable."pic.twitter.com/jsIBKnIPVi
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7/ A tangential point I want to raise is that contrary to popular belief, not all bankers are “evil”. As seen here, some of them are quite capable of seeing their own contradictions. Through logical reasoning & empirical evidences.
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8/ If you were to look at this economic thing objectively, you can say that in earnest some of these central bankers believed what they did was for the best. But now there’s mounting evidence that centrally-managed money might have been a failed experiment.
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9/ Reference for above quotes: https://www.bis.org/publ/bppdf/bispap77e.pdf …
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