1. perhaps the Fed is trying to convince itself and others that it is doing more than validating the endogeneous creation of money? Fed scrutiny of real economy data simply a ritualistic act?
2. on transcending limits, note the summary of the key contribution of Albert Wojnilower by Trevor Evans:
AW argued "that each uptrun in the US business cycle since WWII was brought to an end by a sudden credit crunch, usually caused by a credit expansion coming up against regulatory restrictions that prevented banks from continuing to expand their deposit base. However he argues that banks turned to new forms of liabilities, such as cds, and later the euro dollar market, in order to circumvent restrictions on the amount of interest that could be paid to attract deposits. He also claism that, following each dowturn, the restrictions were lfited in order to prevent the expansion of credit from being constrained in a similar way again. "The difficulty of controlling the expansion of private bank credit through the supply of reserves and the gradual elimination of controls, referred to by AW, have led to a situation where, it is agued, the central bank is only able to regulate the expansion of credit by using interest rates to discourage further borrowing. There is however no concensus about interest rates affect borrowing.Conventional neoclassical theory suggests that the desire to borrow will decline as interest rates rise. By contrast, the Post Keynesians argue that rising interest rates do not in themselves lead to a decline in borrowing, and only interest rates rising to a level that induces a recession will have a significant impact on borrwoing, as industrial and commercial companies are forced to cut back on all their activities." Trevor Evans,Marxian Theories of Credit and Capital, Intl Journal of Political Economy, vol. 27, n1 (Spring 97): 32
3. Endgoeneous money can itself engender balance of payment or exchange rate crises from the real effects of which the reserve center may have some non neglible immunity, i.e., the US can export onto to those who hold its currency the real effects from its inflationary creation of dollars. What are the US specific dynamics of endogeneous money?
YOurs, Rakesh