Dr. Constantin Gurdgiev:

I am glad Dr. Kinsella mentioned QE for people. I am one of the original signatories to the Financial Timesletter on it. I disagree with the notion of an expiry date or that it would need to be used for consumption purposes. The balance sheet of the household is about debt and we can write it down.

The reason we cannot fund infrastructure out of monetary policy and cannot fund the reconstruction of the household balance sheets and instead are obsessed with governments' balance sheet and the banks' balance sheets is precisely the set-up of the euro. The set-up of the euro prevents the use of the monetary policy tool for real economic stimulus. This is why we only have an inflationary target and do not have pure Taylor rule targeting, such as unemployment or nominal or real GDP targeting or anything else.

Accordingly, if we want to have a stimulus programme, we have to find the source of the funding. That funding in Europe is debt but we are not allowed to effectively monetise that debt like the Americans do. The Federal Reserve System buys central government debt. By the way, they also did that in Japan for large infrastructure projects. In a way, Europe is hamstrung on both fronts in terms of repairing household budgets, corporate budgets and investment flows. However, that goes back to the set-up of the euro.