korrents

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A persistently low safe interest rate signals that capital is not very productive at the margin, an underlying economic problem rather than a policy variable.

Drawn from what Olivier Blanchard said

Subjectsinterest ratessurgical outcomes
What this subject means

surgical outcomes Measuring and publishing how individual surgeons and hospitals perform, and what those numbers can honestly support.

On the topicDoes public debt cost what we think it does?under our view: The interest rate is a symptom of the economy, not a lever a central bank pulls

What Olivier Blanchard actually said

  1. Olivier Blanchard Economist; former chief economist of the International Monetary Fund
    A low r is actually a signal that something is wrong with the economy: In effect, if we think of the safe rate as the risk-adjusted rate of return on capital, the low safe rate is sending the signal that, risk adjusted, the return on capital is low.

    Where this was said

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu

    1 Jun 2022

    All 22 korrents from this piecethis one is 3rd

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