One thing in the National Party’s call for a public inquiry into monetary policy that I didn’t comment on yesterday was the framing. The press release is headed “Inquiry needed into impact of tidal wave of cash”. It is a framing I have never liked, whether coming from critics on the left or the right.
My point here isn’t to bag National. They ran with a catchy headline, but the body of their release talks more generally about the overall conduct of monetary policy. But it is a framing that isn’t uncommon (loose talk of “money printing”) so it is an opportunity to restate my view – probably a minority view, but I stand by it – of the macroeconomic irrelevance (to a first approximation) of the Reserve Bank’s LSAP programme.
Rather than write something fresh, here I’ve reproduced the relevant sections of a lecture I gave to some Victoria…
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