Yes, Curves Have Been Forced To Speak Japanese

Economists’ R*, or R-star, is a fiction. It’s one that they came up with after-the-fact to try to explain why their policies didn’t actually work the way policymakers had initially promised. While in public, officials still speak glowingly of each QE, one after another after another, in private they know it deserves absolutely no praise.

Study after study has shown basically the same thing (this pulled from a 2012 IMF research paper):

Research on the effectiveness of earlier quantitative easing has yielded mixed results, with most pointing to limited effects on economic activity. While most papers found evidence that quantitative easing helped reduce yields, its effect on economic activity and inflation was found to be small. The reasons cited included a dysfunctional banking sector, which impaired the credit channel… [emphasis added]

Helped reduce yields. That’s a very curious way to frame (in order to arrive at “mixed results”) what is its only detectable, possible contribution. In fact, even this much is debatable; ask yourself, what is it that QE is always “helping” lower rates? As I put it last week “celebrating” the undeserving theory’s unholy twentieth anniversary: Read more…..


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On March 9, 2021, the National Committee hosted a virtual program with Mr. Winston Ma, where he explored how China’s innovation ecosystem drives next generation unicorns and its young netizens participate in the evolving digital economy, and what emerging markets can learn from China as they dive headlong into the mobile-first economy.

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