From Streettalk Off The Street January 24, 2013 - 9:15am
January 23, 2012
By: Andy Xie
China and the United States are running the greatest experiment in monetary stimulus in modern economic history, and the evidence shows it is not working
Since Alan Greenspan became the Fed chairman in 1987, there has been a policy consensus on the primary role and effectiveness of monetary policy in cushioning an economic downturn and kicking it back to growth. Fiscal policy, due to the political difficulties in making meaningful changes, was relegated to a minor role in economic management. Structural reforms have been talked about, but not taken seriously as a tool in reviving growth. In the four years after the global financial crisis that began in the summer of 2008, the United States' monetary base more than tripled and China's M2 has doubled. This is the greatest experiment in monetary stimulus in modern economic history. Staving off c...
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