Calling out another economist

One way to assess the stance of monetary policy is to assert that there is a natural interest rate (NIR), defined as the rate consistent with output being at its potential. Broadly speaking, monetary policy can be seen as expansionary if the policy rate is below the NIR with the gap between the rates measuring the extent of the policy stimulus.

What we know is that the central bank generally increases the flow of funds from the economy to its capital owner, when rates are lowered. This is a monopoly effect, and the central bank disintermediates part of the banking network. Look no further than the earnings remitted to Congress, and that is not monetary expansion, I am sorry, Bianca De Paoli and Pawel Zabczyk are incompetent economists.

This graph. This is money from the economy to Congress. How is this flow expansionary, it has been going on for seven years.

Wait, this is still printed money!

Yes, but spent with a multiplier near zero, so almost all, about 95%, of this money is a transfer of resources from the private sector which had better use for those resources. Government spending has low multipliers, velocity drops because of price distortion caused by the government channel; that is lower growth, disinflation, more money from the private sector piles up because it is not matched with resources.