Tuesday, March 3, 2009

This Comment at Paul Krugman's New York Times Blog

I just uploaded this comment to Dr. Krugman's post titled hey-who-you-callin-neo-wicksellian?
I read an interesting paper on quantitative easing written by a couple of economists at the Fed. Apart from citing the Japanese case, they also go into something called a “floor price system”, that was an innovation of the New Zealand Central Bank. It would be nice to get some further explanation of the use of the short term interest rate and other factors that can be used to influence money supply. Here, I notice the argument that if the money supply increases in the presence of a ZIRP, you’re just substituting cash for short term debt. This is something I’ve never come across and it would really be useful if this can be expanded on further, either by Dr. Krugman or other knowledgeable commentators.— Indian Investor

This comment has nothing controversial in it; it just asks for further explanation that would be useful to understand better. There's a surprising change today. Previously for several days, as I noted before, my comments there wouldn't appear in the status "awaiting moderation" after I uploaded but today this comment does appear in that status!

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