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Saturday, July 12, 2014

Are Interest Rates Artificially Low? Nope.

Discouraging:

The Meme is Out There, by Paul Krugman: I just answered some questions for Princeton magazine, and among them was this:

Please comment on how artificially low interest rates have impacted the current value of baby boomers’ retirement portfolios and should this be a consideration of the Federal Reserve?

I don’t blame the editor, who after all isn’t supposed to be an economist. But what this must reflect is what people are hearing on the financial news; I’m pretty sure that a lot of people think that all the experts regard interest rates as “artificially low”, and have no idea that to the extent that such a notion makes any sense at all — which is to say in terms of the Wicksellian natural rate — interest rates are too high, not too low.

    Posted by on Saturday, July 12, 2014 at 12:15 PM in Economics, Monetary Policy | Permalink  Comments (71)

          


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