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Given the stated aim of higher interest rates is to increase unemployment, it's not a stretch to expect a causative effect. That said, I'm sceptical the higher
by hgomersall 3y ago
Given the stated aim of higher interest rates is to increase unemployment, it's not a stretch to expect a causative effect. That said, I'm sceptical the higher interest rates achieve the stated aim in any sense, though even screwing over the poor with higher mortgage and loan payments could easily increase crime.
- konschubert 3y agoExcept when the higher interest rates result in a "soft landing". https://www.noahpinion.blog/p/how-did-the-us-achieve-a-soft-landing https://www.noahpinion.blog/p/how-did-the-us-achieve-a-soft-... And yes, higher interest rates do reduce inflation.
- hgomersall 3y agoI know people keep saying "higher interest rates do reduce inflation", but I'm yet to see any supporting evidence for this. Japan is a nice example where the exact opposite appears to be true. The soft landing in the US could easily just be down to the stimulus effect of handing out free money in the form of interest when inflation was going to come down anyway as the supply shocks work through the system. Interest rates predictably influencing inflation is now on the level of a test of faith.