2 ms·

I never said 'exactly'. I said 'similar'. Interest rates are a signal, but since the underlying micro economy is constantly changing, the derived macro economy

by brianto2010 17y ago

I never said 'exactly'. I said 'similar'. Interest rates are a signal, but since the underlying micro economy is constantly changing, the derived macro economy is also changing. Therefore, the (equilibrium) interest rate is constantly changing and always a bit off. You are right. Some interest rates change; others don't. For instance, you can choose between a fixed and variable annuity IRA accounts. I didn't mean to imply that all interest rates change.

anamax 17y ago
> I never said 'exactly'. I said 'similar'. Actually, you wrote "I've heard that inflation doesn't actually 'tax' you because all nominal prices adjust so they have similar (previous) real values." Whenever the adjustment isn't perfect, it's either a tax or benefit. Fixed-rate instruments include an inflation expectation. If reality is different, someone takes a hit.