tag:blogger.com,1999:blog-3621026.post4774284556520031112..comments2024-03-29T06:05:04.162+01:00Comments on Robert's Stochastic thoughts: On Yglesias on Money AgainnnnRoberthttp://www.blogger.com/profile/14455788499385673507noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3621026.post-54226840317970275592012-08-26T01:34:14.525+02:002012-08-26T01:34:14.525+02:00Right. Yglesias thinks (I don't know where he&...Right. Yglesias thinks (I don't know where he's gotten this from) that central banks can always control the price level, the question i just whether this will have the desired effects on real activity. Whereas the whole modern history of monetary policy tells us it's the other way round -- that central banks can only control the price level via their ability to influence real activity.<br /><br />The idea that the Fed controls the "quantity of money" is silly. The only reason you' say it in an undergraduate macro classroom is to explain why it isn't true. And it hasn't been true since the early 19th century, if it ever was. But the idea of credit money as opposed to commodity money is strangely hard for people to accept, even though we experience it every day.JW Masonhttps://www.blogger.com/profile/10664452827447313845noreply@blogger.com