Buttonwood up your mouth

Robert Waldmann

Matty Yglesias has an amazing catch. He says that competitive devaluations achieved via unsterilized interventions would be a good thing, becuase they would cause inflation. He notes that someone disagrees.

The Economist’s Buttonwood

“The result is like a game of deflationary pass the parcel…”

Of course, Mr or Ms Buttonwood should have written

“The result is like a game of inflationary pass the parcel…” which is Yglesias’s point.

The dark ages of macro. I think what is happening is that Buttonwood is sure that selfish begger thy neighbor policies are bad and that allegedly painless remedies based on printing money and buying stuff are unwise, that he or she has noticed that these days deflation is even more feared than inflation and thus decided that printing currency and buying stuff must be deflationary.

Bagehot is turning over in his grave.