IMF wrong on QE

Yesterday the IMF released new analysis of Quantitative Easing, specifically in relation to the Euro Area – Euro Area – Q&A on QE. This is in the context of the ECB beginning to discuss the possibility of introducing a large sovereign debt buy-up as the euro-zone inflation rate looks to be close to deflating (negative inflation). Once again, all the financial commentators are rehearsing their usual claims about driving up inflation etc. The reality is the QE will not provide much help for the euro-zone economies which are mired in recession or stagnant, low growth. What is needed are fairly substantial increases in the fiscal deficits in all Member States and none of the neo-liberal ideologues want to face up to that. So, instead, we get these ridiculous debates and analyses of QE – good and bad and all the rest. The IMF is wrong on QE. But then why should we be surprised about that. An apology or admission of error will be issued down the track, notwithstanding that in between all sorts of spurious forecasts about inflation, inflationary expectations and growth will be issued by them.

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