Many have asked me what I think about the letter criticizing QE2 which was signed by me and other economists. The letter has created quite a stir. I have already written and spoken many times explaining my opposition to QE2, both before the decision was made and afterwards, so it might be helpful just to give a list of posts on this blog and some media interviews:
- Jackson Hole, August 29 "the benefits in terms of lower rates are very small, while the short-term costs of greater uncertainty about the exit strategy and long-term costs from a loss of independence are large."
- The Taylor Rule Does Not Say Minus Six Percent, September 1 it says .75 percent which provides no rationale for QE2
- More on Massive Quantitative Easing, September 8 which refers to a WSJ oped and many other critiques
- Announcement Effects Do Not Prove QE Works, October 7 so the evidence cited in favor of QE2 is pretty weak
- A New Normal for Monetary Policy? October 27 reflects my concerns that there would be a QE3 and a QE4. Maybe the letter and other objections will reduce the chances of this.
- Milton Friedman Would Certainly Not Have Supported QE2, November 3 so be careful about citing him as support
- Empirical Concerns about Anticipation Effects of QE2, November 5 which disagreed with the Washington Post article by Ben Bernanke defending QE2
- QE2 and G20, November 14 in which an unintended consequence of QE2 is discussed
I have also done many TV interviews, from this interview with Steve Liesman on October 15 at the Boston Fed before QE2 was announced to this one last week on Squawk Box
