Economics professor David Beckworth writes that the case is closed over the debate about Milton Friedman and whether he would have supported the Fed’s quantitative easing program: Yes, Friedman would have approved. The latest evidence is based on comments Friedman made in 2000. After reading the document, it’s hard to disagree with Beckworth. Perhaps Alan Meltzer will retract his recent op-ed arguing that Friedman wouldn’t have endorsed QE2.
Daily Archives: November 29, 2010
PONDERING THE NEXT PHASE OF THE DEBT CRISIS
The Fed’s latest round of monetary easing—QE2—has stabilized inflation expectations at a modestly higher level of late. Since mid-October, the inflation forecast based on the yield spread between the nominal and inflation-indexed 10-year Treasuries has bounced around in the low-2% range. That represents a victory of sorts from the summer plunge in the market’s inflation outlook, when fears of a new recession were on the rise.