Neo-Fisherism is on the blogs again. The idea that low interest rates are deflationary – that we’ve had the sign on monetary policy wrong! – started as a fringe theory on the corners of the blogosphere 3 years ago. Michael Woodford has now confirmed that modern theory, indeed, implies the Neo-Fisherian view when people’s expectations are infinitely rational. For Woodford, this is however a paradox of perfect foresight analysis, rather than something actually relevant for monetary policy.Monetarists will be monetarists. But if you want a quick summary of what's going on over there, here it is.
Bruegel
Blogs review: Understanding the Neo-Fisherite rebellion
Jérémie Cohen-Setton
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