After yesterday's infographic on fiscal policy, it seemed right to do one on monetary policy:
Please note: this is the second version of this image, correcting a previous minor error in Box 8.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Do you mind if I use these as is for education of my friends and family?
Please do. Share thjem as much as you like
I find your infographics very useful and print copies of them.
However, I would prefer that the copy was enlarged (or made able to be enlarged) to fill an A4 page – aids readability with a larger font…
Try downloading the A4 offerimng this morning
And any webppage can be enlarged. On a Mac it is Command +. I thnk it is Ctrl + on Windows. That is your answer….
This is a bit unfair. A new chancellor has not yet been appointed and potentially you have undermined a number of the sort of statements that chancellors usually make – and you might well have made life more difficult for the Bank of England.
Is the nation ready for there to be a larger role for logic?
For printing, I use my iPad. In portrait view, I pinch out the post itself, or the pdf version, till the infographic fills the screen. Then I take a screenshot, trim it down to remove any border and save it as a photo. Then print the photo at whatever size or layout I want.
Thanks
These infographics are absolutely brilliant, please keep them coming.
A wee note on this one, the third bullet point in box 8 appears to contain a spurious ‘government’.
Sorry
These take ages to write
It looks as if I need to go slower, even so. A week iun, I am still learning
I will correct this, but not from hospital
Now corrected on my return from hospital. I could not have done it sooner.
Excellent, again.
Thanks
Prints perfect.
Assuming these will be modified over time. Should a very small ‘Ver. No.’ be included.
Bottom right on this one?
That is way too hard…..
The box labeling helps with following the flow and, eventually, making all the infographics consistent in numbering and flowing as columns rather than left – right would be a good move. BUT NOT NOW!!!!
Isn’t the numbering enough?
I really like these infographics Richard but, not being a digital native, I shall probably print them and keep them in ring binder, For that purpose a border would be useful.
Noted
No further formatting required.
Slip the A4 sheet into a punched pocket… then file in a ring binder.
Yes…they are brilliant.
Get well Richard and then keep well.
Thank you
Brilliant presentation format – really clear. It gives me the impression low rates are good and high rates are bad. Is this always true? Question: do very low rates for an extended period (2010s) encourage asset prices to rise, because the already-haves are given access to near-free credit? That seems bad – house prices through the roof. I am ready to have my head bitten off for not already having understood everything 😀
You are right to ask. Low interest rates are not automatically good in every circumstance.
My preference is for interest rates to be around net real zero. That means no significant real reward for simply holding money, but also no significant real penalty for borrowing to invest productively.
The problem in the 2010s was not simply that rates were low. It was that cheap credit was directed overwhelmingly into existing assets, especially housing and shares, rather than into new productive investment.
Those who already owned assets could borrow cheaply to buy more of them. That pushed up prices, increased inequality and made housing less affordable for everyone else.
So the issue is not only the price of credit. It is also who receives it and what they use it for.
Cheap credit for building homes, renewable energy, infrastructure or productive businesses can be beneficial. Cheap credit for bidding up the price of existing houses and financial assets is not.
That is why interest-rate policy alone is inadequate. It must be combined with credit controls, taxation, regulation and public investment.
So yes, prolonged low rates can contribute to asset-price inflation. But that is not an argument for high rates, which punish borrowers across the economy. It is an argument for directing credit towards socially useful purposes instead of speculation.