The Fed does monetary stimulus in late 2012, citing the need to offset the drag from fiscal austerity. Then
2012 2013 turns out to be a pretty decent year, no worse than 2012. Keynesians like Neil Irwin note the mystery and scramble around for explanations:
Why hasn’t austerity been more of a drag on the U.S. economy?
This is the U.S. economy in a nutshell, as revealed in Tuesday’s news ticker: Housing prices rose faster over the past year than they have in the past seven. Consumer confidence hit its highest level in five years. The stock market rallied another 0.9 percent to hover near an all-time high, as measured by the Standard & Poor’s 500. And the national retail price of gasoline has fallen for six days straight and is down 16 cents a gallon since late February, providing nice relief to drivers.
Which all raises an obvious question: Whatever happened to the austerity economy?
And yet not a single mention of monetary offset in the entire article. There’s more work to be done. I’ve got to start posting at a faster rate.
HT: Keep them coming J