Tomorrow becomes yesterday

December 15, 2013

No, not the title of an old show tune, but a quote from Mervyn King. His successor, Mark Carney, mentioned this delightful turn of phrase on Charlie Rose, and I tracked it down through the magic of Google:

Monetary policy supports demand and output by encouraging households and businesses to switch demand from tomorrow to today. But when tomorrow becomes today, an even larger stimulus is required to bring forward more spending from the future. Since the paradox of policy has been evident for almost four years, tomorrow has become not just today but yesterday. When the factors leading to a downturn are long-lasting, only continual injections of stimulus will suffice to sustain the level of real activity. Obviously, this cannot continue indefinitely. At some point the paradox of policy must be resolved.

Thoughtful comment, nicely put. More here.

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