The Jackson Hole Symposium organized by the Federal Reserve Bank of Kansas City has been getting a lot of attention these days. The main reason is that Ben Bernanke announced his intention of doing LSAP (QE) in this symposium a few years back.
One would have expected some improvement by economists on monetary matters but here is Robert Hall from Stanford University in the first talk titled The Natural Rate of Interest, Financial Crises and the Zero Lower Bound:
… Every economic principles book describes how, when banks collectively hold excess reserves, the banks expand the economy by lending them out. The process stops only when the demand for deposits rises to the point that the excess reserves become required reserves and banks are in equilibrium. That process remains at the heart of our explanation of the primary channel of expansionary monetary policy …
When will economists learn? The above shows Hall has no clue whatsoever.
Also, a few economists concede that they have been incorrect about simple basics and causalities but dodge it by saying “you haven’t read the textbook” and so on – so quote the above line!