John At The Center

I do understand why people who think about supply-and-demand expect this tsunami of bonds to push down the prices and push up the interest rates on Treasury bonds a lot.

The argument that it will not do so but will instead boost spending is an old argument–more than three-quarters of a century old–but it is somewhat subtle.

The fact that U.S. Treasury bond prices did not collapse the moment the magnitude of the U.S. government’s 2009 and 2010 fiscal deficits became clear is the one thing that gives me substantial confidence that we Hicksian economists do actually know something about how the world really works.

via We Hicksian Economists Should Be Confident that We Know Something….