Edwin Dolan recently argued that the Fed might be running out of options to prevent deflation, but that their recent policy of paying interest on reserves offers hope for the future. Scott Sumner contests both assertions.

Brad Delong overlooks several highly effective ways of exiting liquidity traps without overshooting toward excess inflation, according to Scott Sumner of Bentley University.

Brad Delong overlooks several highly effective ways of exiting liquidity traps without overshooting toward excess inflation, according to Scott Sumner of Bentley University.

Edwin Dolan recently argued that the Fed might be running out of options to prevent deflation, but that their recent policy of paying interest on reserves offers hope for the future. Scott Sumner contests both assertions.