April 09, 2015

An Implausible (But True?) Interest Rate Scenario

Patrick Marren

Interesting stuff from Brad DeLong​, possibly explaining much of the last decade of economic weirdness:

"You may say: A 10-year nominal Treasury bond rate no higher than inflation is supposed to be the current value of the natural interest-rate? Good God! That is absurd! Something is wrong with our economy, and wrong at a much deeper level than a simple shortage relative to demand of the supply of safe-and-liquid-store-of-value assets that can be hoarded! It makes no...

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