Loading ...So QE-infinity is done. Many and long will be the arguments about whether quantitative easing helped the U.S. economy, and what the costs were — or will be. Most of those arguments will be between those who think quantitative easing just doesn’t get much traction in the economy and those who think that it has a big effect.
But what if QE had the opposite of the intended effect? That is the claim of a small but well-credentialed group of macroeconomists that I once labeled the “Neo-Fisherites,” after the famous monetary economist Irving Fisher. These economists wonder if quantitative easing reduced inflation, instead of increasing it as many feared it would. The Neo-Fisherites go even further than that — they wonder if low interest rates, which we usually think of as being inflationary, are actually deflationary!
It sounds crazy. How could creating money lower the value of money in the long run? read more