This is like MMT inspired nonsense, lower interest rates from central banks aren't causing lower growth.
We have lower growth, so we have lower interest rates. Increasing rates would decrease the price of assets, as we've just seen from the past 12 months. The purpose of that was to handle the NGDP overshoot from covid.
> The only solution is for the regulator, in this case the central banks, to issue guidance for the banks to create credit for only new productive investments
Just plain stupid. I don't even know what this means or what the policy would look like.
> new housing, factories, machinery, or firms, because those are not inflationary
Obviously wrong. What does inflation mean? An increase in the price level. If you increase demand all else being equal, what happens to the price of something?
By the way - that's the whole point of central banking affecting interest rates. To lower the cost of credit so aggregate demand increases (which is inflationary).
You need to give me a really good thesis on why increasing the cost of credit for """"semi-finite""" assets causes lower growth. The gall to end this with "only one logical outcome" smh.
Edit:
It's like you live in post 2008 fantasy land where aggregate demand is depressed forever. We do not live in this world.
We have lower growth, so we have lower interest rates. Increasing rates would decrease the price of assets, as we've just seen from the past 12 months. The purpose of that was to handle the NGDP overshoot from covid.
> The only solution is for the regulator, in this case the central banks, to issue guidance for the banks to create credit for only new productive investments
Just plain stupid. I don't even know what this means or what the policy would look like.
> new housing, factories, machinery, or firms, because those are not inflationary
Obviously wrong. What does inflation mean? An increase in the price level. If you increase demand all else being equal, what happens to the price of something?
By the way - that's the whole point of central banking affecting interest rates. To lower the cost of credit so aggregate demand increases (which is inflationary).
You need to give me a really good thesis on why increasing the cost of credit for """"semi-finite""" assets causes lower growth. The gall to end this with "only one logical outcome" smh.
Edit:
It's like you live in post 2008 fantasy land where aggregate demand is depressed forever. We do not live in this world.