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Lyle Gramley, chief economist at the Mortgage Bankers Association noted that Japanese and West German commitments to stimulate their local economies might require more stimulative monetary policies with lower interest rates.
Structural reforms are complementary to an adequately stimulative monetary policy.
The first condition, stimulative monetary policy, is clearly in place.
But it will require more stimulative monetary policy and inflation overshooting for a while.
Both bubbles are the product of the Federal Reserve's stimulative monetary policy of 2001 to 2004.
If the Fed ends its stimulative monetary policy, stocks with weaker balance sheets could be hit hard, of course.
If he also thinks that appropriately stimulative monetary policy would be bad for society, he should say that explicitly.
With all that, it would seem premature for central banks to even begin to talk about adopting a less stimulative monetary posture.
Barack Obama's decision to nominate Janet Yellen to succeed Ben Bernanke as the Fed's chairman in February raises the odds that stimulative monetary policy will continue.
"While this stimulative monetary policy has arguably aided risky assets, it has increased uncertainty as well, since ultimately it needs to be unwound".
Why would local for-profit businesses be less likely to see the advantages of stimulative monetary policy than some other interest group one might select?
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com