Cash conundrum

Published on 27/10/2012 00:00

George Kerevan (Perspective, 26 October) writes that monetary stimulus from the Bank of England would reduce debt via inflation, while more public spending would “kick-start” the economy.

He neglects both the possible impact of fiscal stimulus on 
inflation and the impact of monetary stimulus on growth. Yet both policies are supposed to work in the same way: by boosting spending.

Monetary stimulus boosts non-government spending. Why should spending cause growth if it is done by politicians, but raise prices if it is done by ordinary people?

William Peden

Leny Feus

Callander