A Wonky (But Worthwhile) Read
The Bank of England’s intervention reminded me of this essay, published nearly twenty years ago by MMT economist, Professor L. Randall Wray. Some of you will be familiar with the Currency School-Banking School debates of the early 19th century and with the evolution of monetary policy (in theory and in practice) in the years since.
Wray’s essay is somewhat long—it covers a lot of ground—but it’s well worth your time, especially if you don’t already understand how to contextualize today’s intervention.
Most economists do not understand that monetary policy has nothing to do with the quantity of money. ~L. Randall Wray
Most economists do not understand that monetary policy has nothing to do with the quantity of money. ~L. Randall Wray
If it's nothing to do with quantity of money , what is it to do with?
I think it’s time for some humility. It’s precisely your ideas of reckless creating money which had led the UK in its predicament. The United States gets away with this at the moment because it’s the world’s reserve currency.