There's More to QE Than Krugman Thinks
Nobel Prize-winning economist Paul Krugman says that quantitative easing was a test of macroeconomic theories. On one side, he says, Keynesian theories predicted that QE would have little effect; on the other side, a whole bunch of alternative schools predicted that there would be high inflation. According to Krugman, the failure of inflation to materialize means that Keynesians prevailed, and this makes sense -- the theories that predicted inflation seem to be due for a re-examination, especially in light of Japan’s very similar experience in previous decades.
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