IDEAS home Printed from https://ideas.repec.org/a/wej/wldecn/527.html
   My bibliography  Save this article

Too Loose for Comfort

Author

Listed:
  • John C. Michaelson
  • Sébastien E.J. Walker

Abstract

This paper argues that the benefits of the current US and UK monetary policy are limited and outweighed by significant costs. The policy of low or negative real interest rates, combined with quantitative easing, may be helpful to large companies and large banks. However, due in part to changes in the financial system over the past 30 years, the policy has not resulted in sufficiently lower borrowing costs or increased access to credit, especially by job-producing SMEs, to compensate for the adverse impact on savers, endowments, pension funds, insurance companies and others. We conclude that the policy is probably retarding rather than assisting economic recovery and that funds used for quantitative easing could be more usefully put towards a form of ‘credit easing’.

Suggested Citation

  • John C. Michaelson & Sébastien E.J. Walker, 2012. "Too Loose for Comfort," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 13(3), pages 69-78, July.
  • Handle: RePEc:wej:wldecn:527
    as

    Download full text from publisher

    File URL: http://www.world-economics-journal.com/Contents/ArticleOverview.aspx?ID=527
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wej:wldecn:527. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ed Jones). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.