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> Higher interest rates have both deflationary and inflationary effects. Higher interest rates by definition reduce the rate of money in circulation by encoura
by 0x8BADF00D 8y ago
> Higher interest rates have both deflationary and inflationary effects.
Higher interest rates by definition reduce the rate of money in circulation by encouraging saving over spending (higher cost to borrow money). Maybe in your mind that leads to deflation, but empirically it doesn’t.
- acchow 8y agoYour jump from "encouraging" to "by definition" is quite the significant leap. I'm not saying I believe higher interests causes inflation, but I believe your logic is flawed.