Prominent Economists Who Advocate a Different Type of Quantitative Easing

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Both John Maynard Keynes and Milton Friedman proposed a style of Quantitative Easing (QE) that was aimed at the real economy. In effect they advocated a different form of QE than that which we are experiencing today: one that would be relayed away from the banking sector and speculators and towards consumers, non-financial businesses and low income earners – and one that could directly back investment projects, rather than create risky asset price bubbles. But who are Keynes’s and Friedman’s contemporaries?


Ben Bernanke, former Chairman of US Federal Reserve Bank

“In practice, the effectiveness of anti-deflation policy could be significantly enhanced by cooperation between the monetary and fiscal authorities. A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices…A money-financed tax cut is essentially equivalent to Milton Friedman’s famous “helicopter drop” of money. Of course, in lieu of tax cuts or increases in transfers the government could increase spending on current goods and services or even acquire existing real or financial assets.”


Lord Adair Turner- Member of UK Financial Policy Committee, former Chairman of Financial Services Authority

“’Helicopter money’ – by which we mean overt money finance of increased fiscal deficits – may in some circumstances be the only certain way to stimulate nominal demand, and may carry with it less risk to future financial stability than the unconventional monetary policies currently being deployed.”


Professor John Muellbauer, Oxford University

“Clearly, the ECB must develop a strategy that works in the Eurozone’s unique system, instead of attempting to follow the Fed’s lead. Such a strategy should be based on Friedman’s assertion that ‘helicopter drops’ – printing large sums of money and distributing it to the public – can always stimulate the economy and combat deflation.”


Professor Richard Werner, University of Southampton (The Economist who coined the term QE)

“This staggering £275 billion largely ended up with the banks in the futile hope that it would result in a substantial increase in UK lending to business. Instead it was used to rebuild their balance sheets and invest in commodity speculation. To ensure that this does not happen again, we need a different kind of QE, to help the wider economy directly and to implement some badly needed green projects that would enhance the sustainability of the economy and improve the environment-as well as creating thousands of new jobs.”


Yanis Varoufakis, Current Finance Minister of Greece

“The EIB/EIF has been issuing bonds for decades to fund investments, covering 50% of the projects’ funding costs. They should now issue bonds to cover the funding of the pan-euro-zone investment-led recovery programme in its totality; that is, by waving the convention that 50% of the funds come from national sources. To ensure that the EIB/EIF bonds do not suffer rising yields, as a result of these large issues, the ECB can to step in the secondary market and purchase as many of these EIB/EIF bonds as are necessary to keep the EIB/EIF bond yields at their present, low levels. To stay consistent with its current assessment, the level of this type of QE could be set to €1 trillion over the next few years…Moreover, this form of QE backs productive investments directly, as opposed to inflating risky financial instruments, and has no implications in terms of European fiscal rules (as EIB funding need not count against member states’ deficits or debt).”


Biagio Bossone, Chairman of the Lecce Group, former Executive Director of World Bank Group

“Now more than ever, what the Eurozone needs is that injections of new money be directed to households, not to commercial banks and high wealth individuals, and that households be reassured that no new tax obligations will be imposed on them to foot future tax bills associated with higher debt. What needs to be done is to use monetary and fiscal policies in a coordinated manner with a view to ensuring that money is created and distributed to agents with a high propensity to spend it.”


Professor Steve Keen, Kingston University, UK

I would have used the capacity of central banks to create money by making a direct injection into individuals bank accounts on a pro rata basis, complicated to work out how, but basically injecting money into peoples bank accounts, on the condition that those people who are in debt pay there debts down so that way you have private debt cancellation coming out of it, not therefore not only benefiting debtors but also benefitting savers who would also get it, and rather than paying down their debts down they would get an increase in cash levels…Its a very indirect and expensive way of getting very little bang for your buck…”


Paul McCulley and Zoltan Pozsar, Chair, GIC Global Society of Fellows and Director at Credit Suisse in the Global Strategy and Research department

“In the cooperation framework the central bank overtly subjects itself to become a partner of the fiscal authority in stimulating economic growth directly as a borrower and spender of last resort for as long as necessary in order to reduce economic slack and thereby root out deflationary dynamics – a target reaffirmed by strategy. In the inflation targeting framework the central bank first generates expectations of negative real interest rates (via commitments to low rates for long, purchases of long-term bonds, or prioritizing employment over inflation) in hopes of the private sector then becoming a willing partner to borrow and dis-save in response to this stimulus – a target that’s in and of itself the strategy… In this paper we argue that simple inflation targets without being reinforced via fiscal-monetary cooperation will fail.”


MP Caroline Lucas, Green Party of England and Wales Politician

“It is understandably difficult for people to get their head around the idea that the Bank of England could magic up £50 billion of Green Quantitative Easing. Yet it has already e-printed £275 billion (around £4,000 for every man woman and child in the UK) in an effort to get increased borrowing to British business via giving the money to the banks. But this money has completely failed to reach small businesses in the real economy which urgently need support. The bankers have had their £275 billion chance. Now it’s time for the Bank of England to help create jobs, stabilize the economy, and support the environment through a package of Green Quantitative Easing.”


Sushil Wadhwani, Former Member of Bank England Monetary Policy Committee

“We need to ensure the extra money leads to higher demand. One good place to start is with the textbook example of printing money to finance consumption – sending every adult in the country a voucher that can be spent in the next three months. Allocating £300 to each of Britain’s 50m adults to spend on goods and services would cost £15bn, or 20 per cent of the £75bn created by the new round of QE. (In 1999, the Japanese government distributed $175 vouchers to the public – 99.6 per cent of them were spent within the six-month limit.) Perhaps you can persuade the MPC that this is preferable to buying gilts?”,


George Magnus, Senior Economic Adviser to UBS Investment Bank

“Ultimately, the Bank could get involved in direct lending to SMEs and to the government, so that the latter could fund infrastructure and other programmes to boost employment. Extraordinary times call for comparable economic thinking. We are a long way from having to worry about inflation and, as things stand, the status quo on policy is leading us into a depression that will sink your medium-term fiscal and economic strategy, to say nothing of the disastrous social consequences.”


Professor Mark Blyth, Brown University

“Unless one subscribes to the view that recessions are either therapeutic or deserved, there is no reason governments should not try to end them if they can, and cash transfers are a uniquely effective way of doing so. For one thing, they would quickly increase spending, and central banks could implement them instantaneously, unlike infrastructure spending or changes to the tax code, which typically require legislation. And in contrast to interest-rate cuts, cash transfers would affect demand directly, without the side effects of distorting financial markets and asset prices. They would also would help address inequality — without skinning the rich.”


Professor Lucrezia Reichlin, London Business School

“In a situation of persistently weak economic conditions it makes sense to consider all options including tools that have stayed long in the closet.”


Simon Jenkins, Journalist at The Guardian

“Abandon helicopters. Use bombers. Bomb Germany, France, Italy, Greece, the entire Eurozone. Bomb them with banknotes, cash, anything to boost demand. The money must go straight to households, not to banks. Banks have had their day and miserably failed to spend. From now on they get nothing.”


Larry Elliot, Journalist at The Guardian

“QE could have been better designed. There could have been a better dove-tailing of monetary (interest rates and QE) and fiscal (tax and spending) policies. There was a strong case for the targeting of QE at specific sectors of the economy, such as green infrastructure. In retrospect, far too much faith was put in the banks to channel QE to where it was needed. Handing a cheque directly to members of the public would have got money into the economy much more effectively.”


Lord Skidelsky, Professor of Political Economy at the University of Warwick

“If we want to print money, I would direct it not to the banks but into the pockets of the British people. This is akin to Friedman’s helicopter money. Here are two ideas: first, we could have a temporary wage subsidy paid to employers to encourage them to take on more workers; secondly, the Government might give every household a Christmas present in the form of a voucher to be spent on British goods within three months. There are many other methods, but the object would be to get the biggest bang of spending per buck of money.”


Collin Hines, Convenor of the Green New Deal Group

“It is time for a debate about what kind of QE can actually turn round the continent’s flagging economy. The Green New Deal group’s paper “Europe’s Choice — How Green QE and Fairer Taxes Can Replace Austerity” suggests the introduction of “green infrastructure QE”.


Robert Peston, Financial Commentator at the BBC

“Because what has been really striking about QE is that it was popularly dubbed as money creation, but it hasn’t really been that. If it had been proper money creation, with cash going into the pockets of people or the coffers of businesses, it might have sparked serious and substantial increases in economic activity, which would have led to much bigger investment in real productive capital. And in those circumstances, the underlying growth rate of the UK and US economies might have increased meaningfully. But in today’s economy, especially in the UK and Europe, money creation is much more about how much commercial banks lend than how many bonds are bought from investors by central banks.”


Richard Wood, Former Policy Advisor to Australian Treasury and Author of How to Solve the European Crisis: Challenging orthodoxy and creating new policy paradigms

“In respect of monetary policy, overt money financing (creating new money and channelling it through net government spending to low income people, infrastructure and the unemployed) could replace the ineffective and wasteful quantitative easing policy as a means to stimulate economic activity. Quantitative easing finances banks and speculators; creates asset price bubbles; distorts risk pricing and resource allocation; causes competitive devaluations and currency wars; and results in reversals and financial distress on exiting the policy. Quantitative easing has no direct positive impact on consumer prices as predicated by the central banks of Japan and the United States.”


Eric Lonergan, Fund Manager and Author of Money: The Art of Living

“Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.”,


Edward Harrison, Financial Commentator BBC, CNBC, and Fox News

“What we want to see for economic growth to occur is that financial institutions are making loans to productive parts of the economy that have the greatest impact on sustainable long-term economic growth. Further, we want to see this economic growth underpinned by household and business income that supports further growth down the line. The key here is that the growth comes not from the financial sector or financial assets but from productive assets that throw off income which can be used by businesses and households to repay the debt and take on even more as productive ventures become available.”,


Richard Murphy, Tax Research LLP

“This, of course, is Green Quantitative Easing  where money is created, in exactly the same way that it was to bail out the banks to the tune of £375 billion, but  this money is instead used to finance investment in the UK economy.  This might be investment in infrastructure such as transport, hospitals, schools and new energy systems, or investment through a Green Investment Bank in partnering British business in creating new opportunities in this country for the benefit of our economy. This is not money that will, in that case,  leave the UK economy: the whole purpose of this activity is to invest as much as possible of the money in this country, and for the long-term to make a return for us all.”


Matt King, Credit Strategist at Citi Group

“Germans make the point that QE just puts off necessary reforms. I’m very sympathetic to that view,” says Mr King at Citigroup. “We’re in a period when investment should be high. People should be saying: ‘I can do something useful with all the cheap money and put it into the real economy.’ But the investment we’re seeing is very disappointing. In the energy sector it is actually being cut.”


Felix Nugee and Johnathan Hazel, Wilberforce Society at University of Cambridge

“An ideal solution, then, would marry the efficacy of fiscal policy at the ZLB with the efficient design of monetary policy. Our argument – and the next part of this paper – is that the proposal of helicopter money can unite these two objectives.”


Paul Serfaty, Director of Asian Capital Partners, Hong Kong

“There is nothing ‘Keynesian’ about using central bank money to buy financial assets as a putative substitute for shortfalls in aggregate demand. Indeed, the failure of this policy to bring about significant multiplier effects, and the pooling of cash in banking and corporate coffers, shows how poor a substitute it is for what Keynes himself recommended: that government should spend directly on capital works, putting cash in the pockets of the employee-consumer, thus driving demand.”


Thomas Fazi, Member of European Progressive Economists Network and author of The Battle for Europe: How an Elite Hijacked a Continent – and How We Can Take It Back

“Overt money financing is the policy with the highest impact in raising demand and output without increasing public debt and interest rates.”






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Frank Van Lerven

Frank is our Research and Policy Analyst, and is responsible for our research on current events. Frank also leads our research in Public Money Creation and Quantitative Easing. Prior to working on the availability of credit under a Sovereign Money system, Frank also researched issues related to the 1844 Bank Charter Act and its implications for contemporary monetary policy. With a Research Master’s in Advanced Political Economy (cum laude) and a BA in African Development Studies, Frank is especially interested in how Western financial systems (and models) influence developing economies.
  • Justinwalker

    I’m sorry, but Positive Money’s ‘solution’ of People’s Quantitative Easing which involves the Bank of England is actually supporting the debt-creating System created by the banking dynasties. The central banking system has to go, lock stock and barrel, including the secretive and privately controlled Bank of England (and it IS privately controlled by the very little known Bank for International Settlements). Please read my latest which fully exposes the criminal banking and financial system courtesy of information provided by insiders including a former Director of the Bank of England:

    BTW, Jeremy Corbyn signed an early day motion calling for the restoration of the Bradbury Pound…

    Suggest everyone regularly visits to get the truth about what’s really happening to us all. I’m afraid all this ghastly Establishment-led paedophile stuff is very much connected to those who are behind money creation and money supply. Positive Money needs to address ‘the big picture’ if it is to be relevant.

    • Robert Searle

      The reality is this. It is virtually impossible to overcome the present financial system unless one has extraordinary leadership powers, and real public support in the form of action rather than words. This is why my project of Transfinancial Economics utilizes a pragmatic approach for revolutionary change in the financial system. Rather than work against it….work with it….anathema ofcourse to conspiracy “thinkers”….!

      • Justinwalker

        How can you be pragmatic with criminals? Did you read my book properly? Did you not take in and understand the quotes from Professor Quigley, Montagu Norman, Vincent Vickers and Thomas Johnston? How are you going to tackle the secretive and all powerful BIS? Sorry, but I don’t do deals with evil!

        • Robert Searle

          The rich are not ALL evil. But they do have great power, and if they can be influenced to move in the right directions… if its got the right price tag ofcourse.. then so be it. This is not a high ethical approach..but what is the alternative?
          For years, and years there have been campaigns against the rich, and the vested interests …and yet, they are still around. It is time to take a more counterintuitive approach.. There is an old saying. It is better the “Devil” you know, than the “Devil” you don’t know. If you understand him, you will know his weaknesses, and you will also know how to change him…

        • Robert Searle

          The super rich, and their vested interests are not all “criminals”. They are part of the present capitalist system which encourages mindless greed, and mindless growth on a finite planet. If you give them the right financial incentives they could move in more positive directions. With Transfinancial Economics this would become a serious possibility.

          • Justinwalker

            Those who create money completely out of thin air as debt are fraudsters and therefore criminals. The whole global financial system is based around this – you can’t pick and chose and attempt to recover just ‘the good bits’ – the whole rotten system has to go! No ‘ifs’ and no ‘buts’! And yes, I have read your effort – unnecessarily complicated with plenty of grey areas for system-servers to hide in. Sorry, but debt-free and interest-free money issued by a nation’s treasury based on that nation’s credit and potential IS the ONLY way forward if humanity is to escape the grip of the globalist banksters.

            And what about those quotes I mentioned – nothing from you about them. And what about the BIS – again, nothing from you. To use the Bank of England as part of ‘Positive Money’s’ solution is absolutely crazy when you discover how 95% of the world’s money supply is controlled by the BIS using its member central banks. And just remember, this same banking global elite also came up with the Man-made Global Warming scam and the Orwellian Agenda 21 – and I write as a former high-level Green Party activist of fifteen years. I am still a ‘Green’ but not one who has been taken in by the globalists and their lies!

            And finally, did you read my effort?

          • Robert Searle

            The thinking here is too simplistic, and too black and white….! I am not into largely dumb conspiracy theories either.

          • Justinwalker

            Why have you totally ignored those telling quotes and not answered my questions I put to you? And what’s all this rubbish about ‘dumb conspiracy theories’? Is this really the best you can do? I’m afraid that your ignorance on money creation and money supply has been exposed for all to see and I would suggest that you file your Transfinancial Economics in the ‘Could do better’ file! And for your information, it IS black and white – it’s either lawful or unlawful. Now please read my e-book properly and come back with something more substantial and more challenging, if you can!


  • Robert Searle

    I am glad to see Richard Murphy’s name “up there” as he seems to have written a lot on QE. See one of his articles at his blog plus the link which leads to an article search list of his understanding of QE as something positive for the Economy, and Society.

  • Matt Usselmann

    How about Milton Friedman, one of Mrs Thatcher’s favourite economists:

    He said: “Under the proposal, government expenditures would be financed entirely by either tax revenues or the creation of money, that is, the issue of non-interest-bearing securities.”

    More, and what it would do to British debt if we followed Friedman’s advice:

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