Jeremy Corbyn’s proposal for ‘people’s quantitative easing’ has attracted significant interest
As a recent message from Positive Money says, monetary policy has unexpectedly taken centre stage in recent weeks. The message continues:
The debate has revealed that the underlying principle behind the QE for the people proposal has considerable support.
In the Financial Times, Martin Sandbu called it “an idea whose time has come”, and listed the various high-profile economists who’ve backed something similar in the past, including Adair Turner, Ben Bernanke, Mark Blyth and Eric Lonergan.
But concerns have been raised about what Corbyn’s policy would mean for the independence of the Bank of England. Some commentators have been warned that changing the Bank’s mandate could lead to high levels of inflation.
Research by Positive Money and others shows that these fears can be addressed, and that it’s possible for People’s QE to be used in a responsible and prudent way.
It’s clear that questions remain about how it would work, what exactly the Bank of England’s role would be, and whether it’s appropriate in today’s economic circumstances.
Since the financial crisis, significant reform of the banking system has not taken place. Positive Money is calling on the UK government to establish a Money Commission. A Parliamentary commission could investigate whether our current monetary policy tools are serving the UK economy and society, and explore potential alternatives.
PM has long argued that whilst money creation remains unexamined, policy makers are unable to tackle the root cause of financial instability, high house prices and rising inequality and intends to launch an email campaign calling on MPs to ask George Osborne to set up a Money Commission.
Forthcoming event with Adair Turner on Monday 7th September in Westminster, London:
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