Economists challenge foundations of monetary economics
'Neo-Fisherian' theories suggest lower interest rates create lower inflation
Central banks and indeed undergraduate economics students have long understood that cutting interest rates will cause inflation to rise. But a growing body of research implies the opposite is true, and leading economists are struggling to overturn the result.
Federal Reserve Bank of Minneapolis president Narayana Kocherlakota caused jaws to drop in 2010 when he suggested holding nominal interest rates low for long enough must eventually cause inflation to fall. The speech was widely attacked
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