In my latest post about climate change, I argued that China’s unique economic system explains a big chunk of the country’s carbon dioxide (CO2) emissions, and by extension of the world’s CO2 emissions. In particular, I made a link with monetary policy by pointing out that credit supply by the People’s Bank of China (PBoC) lied behind the housing and infrastructure construction boom that has taken place in China. Today’s post will explore that phenomenon further.
Just as I was publishing my latest post introducing readers to the crazy world of unconventional monetary policy, two things happened that only heighten my concerns about quantitative easing and its effects on wealth distribution, financial stability, and the environment.
I would like to tell you today about monetary policy. I don’t assume everyone to be familiar with monetary policy and central banks, so let me offer you a brief overview of what that means exactly.