WSJ - Response to Laffer's Editorial
If the U.S. were on a gold standard, Mr. Laffer's monetary analysis would be applicable. However, we are not, and it isn't. The Bank of Japan has driven interest rates to zero, but the Japanese are finding out the hard way that the old rules of monetary cause and effect do not apply with floating currencies. Before the U.S. economy heads down that same slippery slope, you might consider a more contemporary analysis of how monetary policy functions in a floating exchange-rate world.
Eileen M. Debold