jeudi 18 septembre 2014

Central banks balance sheets and growth

In times of depression, the more base money, the more GDP. Draghi promised to get the ECB balance sheet back to its 2012 level, that should be the least he can do. 

However, Japan is still struggling with low nominal growth despite BOJ activism and relatively good real GDP growth. One interesting remark, the FED managed to keep nominal GDP growth almost constant over the past five years, while the BOE stopped increasing its balance sheet, and nominal GDP slowed, which means they probably stopped to soon. 

NGDP targeting would be really awesome. 

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