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Sure, but this doesn't even modulate inflation. Negative real interest rates = an incentive to take out credit = private sector monetary expansion regardless o
by nostrademons 3y ago
Sure, but this doesn't even modulate inflation. Negative real interest rates = an incentive to take out credit = private sector monetary expansion regardless of what the central bank does. It's a positive feedback loop that doesn't stop until you get real rates positive.
- JumpCrisscross 3y ago> this doesn't even modulate inflation Of course it does. To argue that making the real rate less negative doesn’t affect inflation is to imply Turkey could cut its rates to -100% nominal and not suffer any consequences.