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An improvement in the quality of information has two effects on the ex ante welfare of individual countries: A direct effect that increases the efficiency of global capital allocation and welfare, and an indirect general equilibrium effect that increases asset price volatility and may decrease welfare.
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Liberals should like this proposal because it increases assets for the poor.
It would increase asset prices and increased wealth would lead to higher consumption.
The bank set an inflation target of 1 percent in February and increased asset purchases in April.
Two purposes of quantitative easing (QE) that few seem to understand are to weaken the currency and increase asset prices.
But they have also increased asset values, massively in share markets and unevenly but, on balance, substantially in property values.
QE works through central-bank asset purchases that boost money supply; push investors to reallocate portfolios to riskier assets; increase asset prices and reduce bond yields.
Family businesses generally seek to increase asset values, or wealth, he said, while keeping profits as low as possible to keep taxes down.
Some of it went just into the balance sheet and wasn't lent out, but some of it went to increasing asset prices.
His comments follow the new Tokyo government asking the Bank of Japan to increase asset purchases to help drag the country out of recession.
QE has worked, insofar as it has worked at all, by increasing asset prices over and above the level they would otherwise have been.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com