Monday, June 11, 2018

Government sells goods in the currency

The canonical case for democratic delegation arises when there is a paramount need for credible commitment to a particular course of action. Monetary policy is perhaps the clearest instance of this.
Nothing more esoteric needed.  The democracy part is about currency insurance created by government transfers. Monetary policy is about seigniorage, the third color in a three way trade. Best policy now is prepare to devalue.

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