65 votes

Why don't countries like Japan just print more money?

This modern theory is far from commonly accepted. One comment is that printing itself out of debt may be possible for country that is a global reserve currency, but only as long as it is a global ...
o.m.'s user avatar
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57 votes

Why don't countries like Japan just print more money?

Mostly because Japan doesn't actually have deflation at the moment (although it may have between 1998 and 2008). In the last ten years, Japan's inflation rate has been as high as 3.7%. Another way ...
Brythan's user avatar
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32 votes
Accepted

How do central banks outside the U.S. issue USD?

TL;DR: Not being able to issue USD is the point of it. The full discussion can be found in Wikipedia article Currency substitution. The main disadvantage of the currency substitution (i.e., using ...
Roger V.'s user avatar
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26 votes
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Why don't countries like Japan just print more money?

During and after the financial crisis a number of governments actually did so, through a programme called "Quantitative Easing". Their central banks "printed" money (actually, incremented their own ...
Paul Johnson's user avatar
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17 votes
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Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?

Because that would be a bailout and the US government [regulators] said "no bailouts" in this case. Now the FDIC owns all of the banks assets (as a bridge bank) and is trying to sell them (...
Dolphin 613 Motorboat's user avatar
16 votes

How do central banks outside the U.S. issue USD?

Lots of mixed-up questions here. How do central banks outside the U.S. issue USD? Of course other banks (central or not) cannot print USD (at least legally). If they issue USD, they must get them by ...
SJuan76's user avatar
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13 votes

Why don't countries like Japan just print more money?

This isn't quite an accurate summary of MMT, which isn't really relevant to the question either. Let's review a couple things. Inflation Inflation occurs when the money supply grows more rapidly than ...
Tiercelet's user avatar
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12 votes

How do central banks outside the U.S. issue USD?

Such a country has lost a major lever for controlling their economy. They find the benefits of using a widely trusted currency more important than the loss of control. Remaining tools to manage the ...
o.m.'s user avatar
  • 108k
10 votes

Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?

The math on a loan from the Fed may not have worked out A loan from the Fed would have to be paid back at current interest rates. Meantime, SVB is getting payments from long-dated bonds that it ...
Nobody's user avatar
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10 votes
Accepted

Can the European Central Bank "print money" to partially mitigate the economical effects of the coronavirus infection spreading?

The Fed is the central bank of the United States, which is one nation despite the plural form in their name. The ECB is the central bank of some (but not all) EU nations, and their operation is ...
o.m.'s user avatar
  • 108k
10 votes
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Why does the President appoint the heads of the Federal Reserve Banks?

The appointments clause of the US constitution gives the president the power to appoint "Officers of the United States". Unlike the Bank of England, which was a private organisation that was later ...
James K's user avatar
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9 votes
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Are central banks really as undemocratic as some people say they are?

privately owned and controlled central banks, responsible for printing new currency to stabilize the economy, have the power to inject the newly produced currency into projects of their own choice. ...
Brythan's user avatar
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8 votes
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How is the policy of the European Central Bank determined if every country has a different economic situation?

From Wikipedia: The primary objective of the ECB, mandated in Article 2 of the Statute of the ECB, is to maintain price stability within the Eurozone. Contrast this with the United States ...
Brythan's user avatar
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8 votes

Among democratic countries, which central bank is the least autonomous?

It's probably not possible to definitively answer this Q, but Costa Rica is a full democracy according to the index you linked (although only since 2018), but until recently [June 2023] they had the ...
Dolphin 613 Motorboat's user avatar
8 votes

How do central banks outside the U.S. issue USD?

Some apparent misconceptions in the Q: First, issuing money is complicated thing. Straight "printing" or increasing the monetary M1 mass (be it electronic) is not how central banks normally ...
Dolphin 613 Motorboat's user avatar
7 votes

Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?

SVB was insolvent; its assets were less than its liabilities. Even if all its stuff was sold there wouldn't be enough money to pay all the depositors - even though it may have pretended there was, by ...
Reasonably Against Genocide's user avatar
6 votes
Accepted

Among democratic countries, which central bank is the least autonomous?

Japan scores lowest on David Romelli's Central Bank Independence (Extended) index (2022) (out of the 24 "Full Democracies" on the Economist Democracy Index, 2022): Index is from 0 (least ...
user103496's user avatar
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5 votes
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Who decides what can serve as reserve for fractional reserve banking?

In the United States, the Federal Reserve (central bank) publishes the reserve requirements. Reserve requirements must be satisfied by holding vault cash and, if vault cash is insufficient, also ...
Brythan's user avatar
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5 votes

In what context did Larry Summers say sending Russian foreign exchange and/or central bank reserves to Ukraine would 'not be setting a bad precedent'?

Q: In what context did Larry Summers (the Director of the US National Economic Council) say that sending Russian foreign exchange and/or central bank reserves to Ukraine would 'not be setting a bad ...
Rick Smith's user avatar
5 votes
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Why are Central Banks cutting interest rates in response to COVID-19?

Cutting interest rates makes loans cheaper for banks. It's typically used in bad economic times Why is it important? It helps keep banks liquid The Federal Reserve cannot directly improve how our ...
Machavity's user avatar
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4 votes

Can the European Central Bank "print money" to partially mitigate the economical effects of the coronavirus infection spreading?

Reuters: Dutch bank ING warns against further ECB money printing. [...] “I don’t think QE is a recipe to support an uncertain environment,” Hamers told journalists, referring to so-called ...
Dolphin 613 Motorboat's user avatar
3 votes

Why are Central Banks cutting interest rates in response to COVID-19?

The theory goes something like this: If interest rates are lower, there's less reason to save. After all you earn less from interest. If money isn't being saved, it's being spent. More spending (= ...
Allure's user avatar
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3 votes

Why are Central Banks cutting interest rates in response to COVID-19?

By lowering interest rates the Fed's main goal is to prop up the stock market, and support US corporations. This is achieved through the following effects: - it encourages credit creation through ...
Frank's user avatar
  • 336
3 votes

Why don't countries like Japan just print more money?

The ever-present danger in printing money is hyperinflation In economics, hyperinflation is very high and typically accelerating inflation. It quickly erodes the real value of the local currency, ...
Machavity's user avatar
  • 48.2k
3 votes

Why don't countries like Japan just print more money?

If you owe other countries money, and then you print a bunch of money and thus devalue your currency, your creditors will be angry because you will now be paying them less than they expected. ...
Gramatik's user avatar
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2 votes

Are central banks really as undemocratic as some people say they are?

In Russia, the central bank is not private, but constitutionally independent. This gives basis for many conspiracy theories that the bank is controlled by the USA, directed by the USA, invests money ...
Anixx's user avatar
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2 votes

Why don't countries like Japan just print more money?

Japan is a special case. Largely because it doesn't have any real military. By not deflating its currency, Japan allows other countries, and most notably the US to exercise a so-called "carry ...
grovkin's user avatar
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2 votes
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How could Distributed Ledger Technology help the government in tax collection and passport issuance?

By their nature, governments are well placed to use a hierarchical architecture to establish trust. There could be some central government certificate authority which issues and revokes keys in the ...
o.m.'s user avatar
  • 108k
2 votes
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How does the State Council direct the policies of the People's Bank of China?

How does the State Council direct the policies of the PBC? If it doesn't, what are the executive authorities the State Council has over the PBC aside appointing and removing deputy governors? In a ...
ohwilleke's user avatar
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2 votes

In what context did Larry Summers say sending Russian foreign exchange and/or central bank reserves to Ukraine would 'not be setting a bad precedent'?

See Lawrence Summers, Philip Zelikow and Robert Zoellick on why Russian reserves should be used to help Ukraine (The Economist, 2023-07-23): Public international law has always combined “black letter”...
user103496's user avatar
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