Depression is a Policy Choice, Riksbank Edition
It is – or should be – astonishing that unelected technocrats get away with this madness without being immediately ejected from office. From the Riksbank’s latest:
In the forecast, CPIF inflation reaches 2 per cent in 2015. An even more expansionary monetary policy could lead to inflation attaining the target somewhat sooner. But a lower repo rate could also lead to resource utilisation being higher than normal in the long run and to the risks linked to household debt increasing further. The current repo-rate path is expected to stimulate economic developments and contribute to inflation rising towards 2 per cent, at the same time as taking into account the risks linked to household indebtedness.
Low inflation, low output, low employment – it’s simply a policy choice. They know it is a policy choice. They think low inflation, output and employment are the right policy choice, because rising household debt leads to, well, um, maybe low inflation, output and employment.
Via Mr. Svensson, still methodically attacking the madness.