It will surely be interesting to look back in a few years or so (i.e., after the next financial crisis) at the whole idea of too much “slack” in the economy as being sufficient justification for central banks to have taken such unprecedented actions, money-printing-wise.
Here, economist Paul Krugman talks to Bloomberg’s Tom Keene on the subject.
It’s easy to sympathize with the unemployed as the global labor market has clearly fallen on tough times in recent years, but, the idea that all you have to do is stimulate the same levels of demand that we saw before the last financial crisis and everything will be hunky-dory still strikes some of us as loony.
Of course, it’s entirely possible that this is exactly what we’ll see as policy makers seem to be working under the tacit assumption that all we have left are bubbles and that we need to create more and bigger ones to regain our lost prosperity.
