3 ms·
well, i'd say all interest rates are endogenous: determined by fed policy or future expectations of fed policy based on macro variables. The fed can manufactur
by bubbleRefuge 5y ago
well, i'd say all interest rates are endogenous: determined by fed policy or future expectations of fed policy based on macro variables. The fed can manufacture as much 'funding' of demand as it wants to as it has an unlimited buying power.
- nickles 5y ago> all interest rates are endogenous: determined by fed policy or future expectations of fed policy based on macro variables The Fed frames its policy response in terms of the somewhat nebulous natural rate, which implies that there is some exogenous component to rate policy. Additionally, rates have consistently trended downwards for 500 years, well before the invention of central banks [0], supporting the notion that rates are driven by exogenous factors. [0] https://econreview.berkeley.edu/the-long-decline-of-global-interest-rates/ https://econreview.berkeley.edu/the-long-decline-of-global-i...