tag:blogger.com,1999:blog-2098432983500045934.post6194938034454319567..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Palley on Two Kinds of RecessionThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-68827040188106811312017-05-09T07:41:31.925-04:002017-05-09T07:41:31.925-04:00I say stories that contradict the evidence I can s...I say stories that contradict the evidence I can see are probably fiction. <br /><br />It's curious that you bring up QE as evidence that the Fed controls interest rates. Interest rates remained unchanged for some time before, during and after QE so I don't see any evidence from the QE that the Fed is behind rate changes. jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-72601469843700099082017-05-08T13:31:24.253-04:002017-05-08T13:31:24.253-04:00dAMN... I struggled for a long time to learn it. A...dAMN... I struggled for a long time to learn it. And then after I learned I I knew it for long time. And now it is stuck in my head and I just say it and you always catch me...<br /><br />Actually I'm pretty happy thinking of the demand for borrowable money as market driven and the supply as Fed-and-creditor driven. And the Fed is capable of doing things (like quantitative easing) that creditors cannot match.<br /><br />And perhaps Fed rates and market rates generally move together. But the Fed is not obligated to make decisions based on the profit motive, so there may be differences. Maybe the Fed can slow an increase or speed up an increase in market rates, or slow or speed up a decrease.<br /><br />How would you say it Jim?<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-25656714467947867062017-05-08T10:30:23.216-04:002017-05-08T10:30:23.216-04:00"What's the same about recessions before ..."What's the same about recessions before and after the mid-80s is that interest rates rise until recession occurs, and interest rates fall until recovery occurs."<br /><br />Let's assume that's true, where is there any factual evidence that the Fed is the cause of those observed changes in interest rates? By factual evidence I mean something besides people telling stories. There is certainly plenty of story-telling, but the stories disregard the fact that changes in Fed interest rates have consistently lagged behind and followed market interest rates. jimnoreply@blogger.com