Ruskin: Pricing In Permanence to Expanded Balance Sheets

Professor Fisher discusses the implications of maintaining low interest rates and the potential permanence of expanded balance sheets. The conversation covers the challenges of tapering in Europe and Japan, the debate over inflation targeting, and the possibility of changing central bank mandates to focus more on growth and job creation. The discussion also highlights the differences between domestic and international inflation, emphasizing the impact of globalization on goods and services prices.

What is a potential consequence of central banks maintaining large balance sheets?

• Immediate economic growth

• Decreased asset prices

• Permanent low interest rates

• Increased inflation rates

What is a potential outcome if central banks attempt to taper their balance sheets?

• Immediate deflation

• Financial market tantrum

• Market stability

• Economic boom

What is a key challenge in the central banks' ability to influence inflation?

• Controlling asset prices domestically

• Increasing GDP growth

• Raising goods prices in an international context

• Reducing unemployment rates

What might central banks consider focusing on instead of inflation?

• Currency stabilization

• Asset inflation and business cycle drivers

• Reducing national debt

• Increasing interest rates

What example is given to illustrate the impact of external factors on inflation?

• United States

• Japan

• Germany

• China