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“Do something, do anything” — Desperation


 “Sterilized fx: They may attract attention and make people feel good, but ultimately they’re all show and no dough”~The Federal Reserve Bank Minneapolis

If they don’t work, why do them?

In the end, as described above, sterilized fx interventions—like their cinematic counterparts—are all show and no dough. Economic theory and empirical evidence tell us so. So why do them? At this point, a perfectly good answer would be to throw up one’s hands and say, “I don’t know.” But let’s take a look at a couple of commonly cited rationales. Link to FRB Paper

- Davos

 

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