Article discreditng the thesis that Mao "killed millions of people" in The Great Leap
#94
(01-05-2017, 12:15 AM)Jester Wrote: ...the correct stance of monetary policy is to keep rates low until the economy recovers, or inflation kicks in ....
My only concern is that zero becomes punitive to those who need to save (without risk). Low is ok, so long as it is not too low. Too low, being zero. I'd like to see a normal floor for inter bank borrowing at maybe .5, and .25 under extraordinary conditions.

St. Louis Fed - The Fed and Interest Rates: A Floor with a Subfloor

How the Fed is hurting seniors

Or,
Krugman Wrote:So let me explain how I think about zero rates and their relationship to the depression we’re in. (Yes, it is a depression, even if we’re having some job growth; there was a lot of job growth between 1933 and 1937, but it was still the Depression).

Think of the supply and demand for loanable funds. The tricky thing about interest rates is that there are seemingly two theories of interest rates — loanable funds, which is about supply and demand for savings, and liquidity preference, which is about the tradeoff between money and bonds. Which is right? Both are — because savings and investment also depend on GDP, which can change. That’s one point of approach into the IS-LM model.
from NYT - Zero Bounds and Butter Mountains (Wonkish) FEBRUARY 6, 2012

So, ultimately, I'd like to see Janet Yellen push back at the policy makers and tell them to do their jobs. Not take on "saving the economy" as an extraordinary monetary policy mission alone. All the things Ben Bernanke and friends did have both positive outcomes, with profound negative side effects.
”There are more things in heaven and earth, Horatio, Than are dreamt of in your philosophy." - Hamlet (1.5.167-8), Hamlet to Horatio.

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RE: Article discreditng the thesis that Mao "killed millions of people" in T... - by kandrathe - 01-05-2017, 04:42 PM

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