Rajan on helicopter money, WWI generals, and monsoon

Raghuram Rajan, governor of the Reserve Bank of India, speaking in a wide-ranging interview with MarketWatch:

...I think there is more of a consensus that monetary policy pretty much has run its course. There are still guys who are looking for helicopter drops of money but I think that is a step sort of too far into the dark, where I am not sure there is a political consensus to do that in the major economies, if it comes to that.

My sense is industrial countries’ central banks should probably consider whether they are doing more harm than good by easing further.

...more moves in the direction of accommodation ought to be thought of very, very, carefully. Because we haven’t seen all the moves so far pay off. And at some point, like the generals in World War I, sending people over the trench and seeing them mowed down, you start asking whether this tactic actually works. And you can’t keep saying more, more, more, right? So I think we’re about at that place where we need to ask is more the answer? That doesn’t mean less is the immediate answer. The problem with monetary policy is that changes matter. From where you are, you change very abruptly, you cause a lot of disruption. You have to have a measured pace of change. But it is probably not towards more accommodation, in my view.

Assertive, but importantly also down-to-earth and plain, talk by a leading central banker using an unusual war analogy to discuss monetary policy. Worth reading in full.