Saturday, October 1, 2016

Thomas Palley on NIRP

From Why ZLB Economics and Negative Interest Rate Policy (NIRP) are Wrong: A Theoretical Critique
NIRP draws on fallacious pre-Keynesian economic logic that asserts interest rate adjustment can ensure full employment. That pre-Keynesian logic has been augmented by ZLB economics which claims times of severe demand shortage may require negative interest rates, which policy must deliver since the market cannot... Worst of all, NIRP maintains and encourages the flawed model of growth, based on debt and asset price inflation, which has already done such harm.

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