The Lens
Reactions to Fed Chair Powell's Speech
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders
7 comments:
Randall Wray's line has sometimes been that we really do not know which effect interest rate rises really have. One suspects that he is more in the "interest rate rises drive inflation camp". But consider possible contrary effects, such as, in times of high household debt, the likelihood of higher interest rates increasing foreclosures, and thereby contracting aggregate demand (I suggest this although a wave of foreclosures is not likely to lower shelter costs).
"Curiously to me, Stephanie does not mention the role of raising the interest rates as potentially contributing to inflation when Mike, Warren, and Bill have been doing so for some time."
Why is that curious given the split between Modern Monetary Theory and Modern Money Theory?
It's been obvious for a while. The more some people align with the Democrats, the more Price Anchorism is sidelined in favour of something that is essentially indistinguishable from standard Post Keynesian thought - messing around with interest rates trying to centrally plan the 'money supply' in effectively a Bretton Woods style currency environment if not outright dollarisation.
The Politically Correct Academic Consensus is pulling in those who want to be members of that club, particularly when their team is notionally in charge.
Powell also said : “we continue to navigate by the stars under cloudy skies!”
What the F does that mean? 🤔
The whole thing is political… the Biden people still have a major political problem with “inflation” and their Fed is being told to sound concerned about it and appear to be trying to do something about it,,,
If elected Trump will demand his Fed to slash interest rates..,
It's the 'twin star hypothesis' that is the basis of New Keynesian belief. The neutral rate of interest (r*) and the natural rate of unemployment (u*).
Less navigating by the stars than guided by them - since neither of those things can be measured or seen, because they don't exist.
And then they wonder why we equate these people with astrologers.
Please promote:
https://mrkeconomicsmmtgeorgism.blogspot.com/2023/08/mmt-economics-basics.html
Promote: “ QE the entire debt.” ?
lol the whole banking system would crash…
“MMT Basics” is now to crash the entire US economy?
Yo,
https://x.com/wbmosler/status/1688954587921756178?s=61&t=2WPBW-5PNOSZxkEWhNtQfw
“ banks lose deposits and reserves=deleveraging=lower leverage ratios etc.=stronger bank.”
Try to employ your feeble Art degree brain and run this in reverse ie QE….
Even Warren finally understands this now..
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