Central banks substituted asset inflation for fiscal stimulus after 1998

Evidence

The bust was staved off through a series of rapid interest rate reductions made by the US Federal Reserve; and these reductions marked the beginning of a lengthy period of ultra-easy monetary policy. Implicitly the goal was to let equity markets continue to rise despite their ‘irrational exuberance’, in an effort to increase the nominal wealth of companies and households and hence their propensity to invest and consume. In a world where the US government was trying to reduce its deficits, fiscal stimulus was out of the question. This ‘asset-price Keynesianism’ offered an alternative way to get the economy growing in the absence of deficit spending and competitive manufacturing. — Nick Srnicek, Platform Capitalism, 30

Categorization

• DEFINE: Defines ‘asset-price Keynesianism’ — a distinct concept worth pinning precisely for the platform-capitalism analysis.
• XREF: connects to: Post-1990s growth ran on government-facilitated asset inflation rather than direct investment — Andrew deWaard, Derivative Media: How Wall Street…, 83; Quantitative easing stabilized banks while inflating asset values for the affluent — Andrew deWaard, Derivative Media: How Wall Street…, 84; Reformers demand flexible exchange rates and growth-oriented central bank policy

Related

• Post-1990s growth ran on government-facilitated asset inflation rather than direct investment (similarity 0.85)
• Quantitative easing stabilized banks while inflating asset values for the affluent (similarity 0.80)

Broader Connections

• Post-1990s growth ran on government-facilitated asset inflation rather than direct investment #corroborates (0.85) — Andrew deWaard, Derivative Media, 83
• Quantitative easing stabilized banks while inflating asset values for the affluent #expands (0.80) — Andrew deWaard, Derivative Media, 84
• Reformers demand flexible exchange rates and growth-oriented central bank policy #corroborates (0.72)