Paul Krugman

@paulkrugman ↗

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Last Checked Dec. 11, 2021

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Tue Oct 26 19:25:27 +0000 2021

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Paul Krugman @paulkrugman

Again, in an arithmetic sense the money multiplier has declined, but that's not a helpful way to describe what's going on, which is instead that the gears have simply been disengaged 13/ — PolitiTweet.org

Posted Oct. 26, 2021

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Paul Krugman @paulkrugman

So M1 and M2 are no longer policy variables, even potentially; they're determined mainly by demand for deposits, and the Fed can't change that through its operations. As I said, money is endogenous 12/ — PolitiTweet.org

Posted Oct. 26, 2021

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Paul Krugman @paulkrugman

So in a zero-rate environment, velocity and similar concepts just don't help you understand what's happening. If anything, they create confusion by suggesting that the size of the monetary base matters under conditions where it doesn't 14/ — PolitiTweet.org

Posted Oct. 26, 2021