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> Can somebody explain how raising rates can do anything to what really seems like a supply side problem When supply is too low, inventories are restored by p
by jbay808 4y ago
> Can somebody explain how raising rates can do anything to what really seems like a supply side problem
When supply is too low, inventories are restored by producing more goods than we consume. That also happens to be the definition of saving. Higher interest rates incentivize saving. Therefore, higher rates create the correct incentives to resolve a supply-side problem.