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Brad DeLong's Grasping Reality 2019-05-14 14:00:52

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Put me down as someone who thinks that the Federal Reserve and the European Central Bank have not tried and are not trying hard enough to learn from the bank of Japan. They still do not seem to be at the point of understanding the relevance of Japan for themselves as well as Paul Krugman did two decades ago, when he wrote his Return of Depression Economics https://books.google.com/books?isbn=0393320367, "Japan's Trap", and "It's Baaaack: Japan's Slump and the Return of the Liquidity Trap". This is not a good situation to be in: Enda Curran and Toru Fujioka: BOJ's Never Ending Crisis Has Lessons for World's Central Banks - Bloomberg: "The underlying problems confronting the BOJ—slowing growth, tepid wage increases, lackluster productivity gains and aging populations—are becoming more

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Put me down as someone who thinks that the Federal Reserve and the European Central Bank have not tried and are not trying hard enough to learn from the bank of Japan. They still do not seem to be at the point of understanding the relevance of Japan for themselves as well as Paul Krugman did two decades ago, when he wrote his Return of Depression Economics https://books.google.com/books?isbn=0393320367, "Japan's Trap", and "It's Baaaack: Japan's Slump and the Return of the Liquidity Trap". This is not a good situation to be in:

Enda Curran and Toru Fujioka: BOJ's Never Ending Crisis Has Lessons for World's Central Banks - Bloomberg: "The underlying problems confronting the BOJ—slowing growth, tepid wage increases, lackluster productivity gains and aging populations—are becoming more pronounced in other developed economies. This increases the likelihood of more drawn out stimulus, pushing others down the same road as Japan. 'When Japan first confronted the problem of very low inflation, monetary economists pooh-poohed the problem, saying there was an easy fix', said Raghuram Rajan, former governor of the Reserve Bank of India and now a professor at the University of Chicago. 'After confronting the same issue in their own countries and showing an inability to deal with it, there seems to be a general consensus that the problem is harder'. Its latest experiment in yield-curve control... has drawn the attention of Federal Reserve Deputy Chair Richard Clarida amid an examination of strategy at the U.S. central bank...

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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