Paul L. CaronDean
Thursday, June 11, 2015
By Paul Caron
Joseph E. Stiglitz (Columbia), New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals:
Scholarship, Tax | Permalink
Even the Fed admits that waterboarding Wall Street with money creates inequality:
"Federal Reserve policies launched in a historic economic slump may have exacerbated wealth disparities in the U.S., according to new research from the Philadelphia Fed.
“Monetary policy currently implemented by the Federal Reserve and other major central banks is not intended to benefit one segment of the population at the expense of another by redistributing income and wealth,” writes economist Makoto Nakajima in the second quarter edition of the regional central bank’s Business Review."
“However, it is probably impossible to avoid the redistributive consequences of monetary policy,” the paper says.
Such effects are especially pronounced when the central bank undertakes a concerted monetary stimulus as it did during the financial crisis of 2008 and the weak economic recovery that followed, the report says. Official borrowing costs have been effectively zero for six and a half years, and the Fed purchased more than $3 trillion in mortgage and Treasury bonds in order to further encourage borrowing and investment by keeping long-term rates down.
Posted by: Dale Spradling | Jun 12, 2015 10:58:53 AM
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