Saturday, August 17, 2013

When hope interferes, science turns to alchemy.

As I see it:

There's no clear connection between increasing the Q of M and increasing real output.

As Lars Christensen sees it:

... easier monetary conditions mean higher nominal GDP growth (remember MV=NGDP!) and with sticky prices and excess capacity that most likely also mean higher real GDP growth.

"Most likely," he says.

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