He defended quantitative easing in the case of Japan:
"I think we would get bang for the buck. I think QE or quantitative easing got a bad rap - people say it failed in Japan. The truth of the matter is it really didn't fail in Japan - they planned to actually stop, after a given period. It did stop the deflation. And I think that it would support prices and assets and the economy if we move forward on that."
This is an absolutely remarkable statement. As I reported a few days ago, Japan has recently announced its 17th consecutive month of deflation. Japan is still in a deflationary spiral 20 years after its stock market bubble crashed in 1990. So what on earth does Siegel mean?
John, I am thinking back to that Richard Koo presentation you posted a while ago. From what I read, Japan, over the past 20 years, has not tried just one approach that failed. So can anyone say QE did not work or that debt reduction did not work, or whatever-the-policy did not work?
it seems like Richard Koo was saying something like this; Japan had rival political parties changing monetary policies OVER and OVER during the past 20 years. Japan's PoliticalParty#1 did stimulus and the enconomy began to recover, then PoliticalParty#2 came in and paid down debt and the economy faltered, then PoliticalParty #1 was voted back in and applied stimulus again and the economy began to recover. Then PoliticalParty#2 came back in and paid down debt,and then PoliticalParty#1 did stimulus....
The link to the presentation has changed over time, and here is the link;http://csis.org/event/economic-outlook- ... ichard-koo
Thanks for another excellent thought-provoking post and for your work with Generational Dynamics.