Judging by output kept near potential despite weak private demand, Japan's decades of high debt and low inflation reflect a qualified policy success, not failure.

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  America borrowed cheaply from the world and spent it on consumption rather than investment, exactly as Greece did.

  Blanchard reads Japan’s decades of high debt and low inflation as a qualified policy success, because output stayed near potential. Cochrane reads America’s version of the same borrowing as Greece before the crisis. The two countries differ in ways that could make both readings right, and neither man leaves much room for the other’s.

Shared subject first, then similar wording. They may agree or disagree.

• Central bank purchases of government bonds are not bailouts and do not automatically cause inflation, since they only change the composition of the consolidated government's liabilities, not their total. OBOlivier Blanchard1 Jun 2022inflationinterest rates
• Central banks should hold inflation-protected bonds as primary assets JCJohn H. Cochrane1 Oct 2026inflationinterest rates
• Holding real assets should help central banks control inflation. JCJohn H. Cochrane1 Oct 2026inflationinterest rates
• Inflation could stay elevated for a while even as the Fed keeps raising rates, because of war-driven costs and AI capital spending. BCBen Carlson27 Sept 2026inflationinterest rates
• Raising interest rates cannot meaningfully cool inflation when structural fiscal deficits, not private-sector lending, are its main driver. LALyn Alden8 Jan 2025inflationinterest rates

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