In the same comment on the same Sumner post, the same Bill Woolsey writes:
A regime shift might cause a bubble as people learn the new regime.
But the inflationary trend ends up with real credit demand, real credit supply, the real interest rate, the relative prices of assets, and the real quantity of money all approximately the same.
What bothers me? The objections and the rebuttals, all approximately the same as they have been for too long now.
It would have been so easy for Bill Woolsey to consider the ratio of debt-to-money in that "new regime" of faster money growth. But Woolsey didn't.
It's what Daron Acemoglu and James Robinson were talking about. On the blogs, commentary often boils down to "well-understood and broadly-accepted notions".
2 comments:
Art -
Not exactly on-topic, but I know you will be interested.
For unrelated reasons, I was looking at this post of mine.
http://www.angrybearblog.com/2012/09/why-spendinggdp-is-terrible-horrible-no.html
In comments, rjs refer to this post by Steve Roth.
http://www.asymptosis.com/does-reducing-the-federal-debt-cause-financial-collapse.html
Which points to this post by Rodger Mitchell.
http://rodgermmitchell.wordpress.com/2011/07/09/why-bank-lending-leads-to-recessions-a-counter-intuitive-finding/
Enjoy!
JzB
A passage from some Jack Vance book:
"I am not at all cramped, and there is much to be learned in the documents yonder." He indicated a massive case thirty feet long and ten feet high.
"I discover dissertations, contradictions, and reconsiderations of these same dissertations; and reconsiderations of the contradictions and contradictions of the reconsiderations---all indexed and cross-indexed in the red and blue volumes yonder. I plan to use some of the more discursive reconsiderations for fuel, unless I am furnished a few more sticks for my fire."
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