Mankiw's Baseless Arguments - Robert P. Murphy - Mises Institute

Mankiw's Baseless Arguments - Robert P. Murphy - Mises Institute: "When the Treasury pays someone interest, it's not inflationary; it simply leaves less money (out of general tax receipts) available for other spending purposes. On the other hand, when the Fed pays interest on reserves, it necessarily increases the monetary base.

Thus, Mankiw's solution for dealing with unprecedented excess reserves is for the Fed to create even more reserves in order to pay bankers not to make new loans. Does that sound like a good long-term plan for the economy?"