Magazine article Regional Economist

Letters to the Editor

Magazine article Regional Economist

Letters to the Editor

Article excerpt

These letters pertain to articles in our Third Quarter issue (stlouisfed.org/ publications/regional-economist/third-quarter-2017). The first letter is about the article Quantitative Easing: How Well Does This Tool Work?

Dear Editor:

I agree with you on the point that QE should not be repeatedly used in the future as a monetary policy because (1) purchasing private bonds is too influential to the Arms' financial health, which may result in economic biases; and (2) public sentiment can no longer be more optimistic than it was from 2008. On the other hand, I believe that people's faith in QE positively worked at least in the past.

In the analyses with Japan and Canada, you did not mention exchange rates. However, both Japanese yen and Canadian dollars significantly changed during the past decade. I also studied international economics and learned that Canadian transports with the U.S. remarkably increased after US-Can FTA (1989), and its economy became more reliant on the U.S. economy. Likewise, Japanese trade volumes and its stock prices are reacting in accordance to JPY-USD exchange rates.

Therefore, the fact that Canadian real GDP boosted without QE is explained by 1) its reliance on US economy, and 2) large fluctuations in exchange rates.

By the way, nominal GDP in U.S. dollars shows completely different trends. The growths from 2008 to 2015 are: Canada 0.24 percent, Japan -13.06 percent and U.S. 23.11 percent.

Emi Igawa, Nagoya, Japan

The second letter comments on the article titled Household Participation in Stock Market Varies Widely by State. …

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