Bernanke knows why ‘currency war’ is good news – US lawmakers don’t

I stole this from Scott Sumner:

Sen. Tom Coburn (R., Okla.) asks whether all the major central banks easing might diminish the benefits and lead to trade protectionism.

“We don’t view monetary policy aimed at domestic goals a currency war,” [Bernanke] says. Easing policy can be “mutually beneficial” to other countries such as China, which depends on domestic demand in the U.S.

It’s a “positive-sum game, not a zero-sum game,” Bernanke says.

I don’t think Bernanke is reading this blog, but I feel like quoting myself:

Monetary easing is not a negative or a zero sum game. In a quasi-deflationary world monetary easing is a positive sum game.

I have not always been impressed with Bernanke and he has certainly made his fair share of mistakes, but he certainly is more knowledgable about monetary policy than Republican lawmakers.

 

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