Martin Wolf from Financial Times wrote a thought provoking article with title "Why it is right for Central Banks to keep printing". The article speaks directly on the hot topic of the right balance of monetary and fiscal policy. Wolf is against fiscal tightening right now and in favor of a continuing monetary easing, To support his belief he sites a paper that refers to Milton Friedman's ideas. It is a paper by Randall Wray which according to Wolf it proposes a harmonized coordination of Fiscal and Monetary policy so that none of the two does the heavy lifting alone. Even though I have not read Wray's paper and I cannot comment on it, I promise to comment on it in due time.
Back on Wolf's article, it sparked a lot of discussion, as evidenced by the long list of comments following the article. Questions begging for an answer: What is the right balance between fiscal and monetary policy? Quantitative easing or not? Do Debt-to-GDP measures matter and when are they "too" high?
On the quantitative easing front Wolf cites Charles Bean's, Governor at the Bank of England, talk on the subject.
