Prominent Activists and Special Advisors who advocate a different type of QE
In a recent post, Positive Money showed that there is a strong intellectual history behind the various proposals for alternatives to QE that were aimed at the real economy. Today, these types of proposals are commonly referred to as “People’s QE”, “Sovereign Money Creation”, and “Helicopter Money” amongst others.
They advocate a different form of QE than that which we are experiencing today, one which would be relayed away from the banking sector and speculators and towards consumers, non-financial businesses and low income earners – and one that could directly back investment projects, rather than create risky asset price bubbles.
We are currently releasing a series of posts that illustrate the various influential people who advocate a different type of QE. Each post will address a separate category of influencers. Today’s post will highlight quotes made by prominent by: Activists and Special Advisors.
Frances Coppola, Former City Worker and Acclaimed Economics Commentator
“Would direct reflation of the economy through a modern Debt Jubilee, “helicopter money” and/or a money-financed investment programme have worked better? I am one of many who think it would. We need investment, yes, but while interest rates remain low we can have this through conventional bond financing at little cost. To my mind the attention of the new Labour party leadership should be elsewhere”
Ann Pettifor, Director of Policy Research in Macroeconomics, Honorary Research Fellow at the Political Economy Research Centre at City University and a fellow of the New Economics Foundation, London
“Instead, with the help of the monetary authorities, government could increase spending on sound infrastructure projects. Low-cost financing by the Bank of England would enable George Osborne to implement Vince Cable’s public infrastructure investment plans.”
“The idea of ‘Green QE’ is that the Bank of England would – with the agreement of the government – buy bonds from e.g. the Green Investment Bank, which could then use the financing to subsidise low carbon projects.”
Biagio Bossone, Chairman of the Lecce Group, former Executive Director of World Bank Group
“Now more than ever, what the Eurozone needs is that injections of new money be directed to households, not to commercial banks and high wealth individuals, and that households be reassured that no new tax obligations will be imposed on them to foot future tax bills associated with higher debt. What needs to be done is to use monetary and fiscal policies in a coordinated manner with a view to ensuring that money is created and distributed to agents with a high propensity to spend it.”
Josh Ryan Collins, New Economics Foundation
“The Bank of England’s programmes of Quantitative Easing (QE) and Funding for Lending (FLS) are failing to stimulate GDP and rebalance the economy. Both policies falsely assume that the UK’s risk-averse capital markets, corporate sector and constrained banking system can be nudged into supporting the productive economy. We propose a new approach: one that channels investment directly into new housing, infrastructure and SME lending, boosting productivity and exports. QE must become less scattergun and more strategic, with reformed governance structures to match.”
Richard Murphy, Tax Research LLP
“This, of course, is Green Quantitative Easing where money is created, in exactly the same way that it was to bail out the banks to the tune of £375 billion, but this money is instead used to finance investment in the UK economy. This might be investment in infrastructure such as transport, hospitals, schools and new energy systems, or investment through a Green Investment Bank in partnering British business in creating new opportunities in this country for the benefit of our economy. This is not money that will, in that case, leave the UK economy: the whole purpose of this activity is to invest as much as possible of the money in this country, and for the long-term to make a return for us all.”
Thomas Fazi, Member of European Progressive Economists Network and author of The Battle for Europe: How an Elite Hijacked a Continent – and How We Can Take It Back
“Overt money financing is the policy with the highest impact in raising demand and output without increasing public debt and interest rates.”
“It is time for a debate about what kind of QE can actually turn round the continent’s flagging economy. The Green New Deal group’s paper “Europe’s Choice — How Green QE and Fairer Taxes Can Replace Austerity” suggests the introduction of “green infrastructure QE”.
Andrew Watt, Chief Economist Institute for Macro Economic Policy (Germany)
“In the real world the channel by which the additional central bank money enters circulation is through a fiscal measure, of which there are three main types: the government can use the base money created by the central bank to cut taxes, to make transfers to households, or to engage in higher government spending.”
Jordi Gali, Leading Researcher Centre of Research and Economics International
“A fiscal stimulus, in the form of a temporary increase in government purchases, financed entirely through money creation, in contrast with the unconventional monetary measures undertaken by the Fed and other central banks (e.g. quantitative easing), such a policy has a direct effect on aggregate demand, and hence on output and employment.”
http://crei.cat/people/gali/gmoney.pdf
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