431–433 of 433 posts
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Government debt yields are a nearly 1 to 1 function of the interest rate, assuming there's confidence in the currency and the government's ability to tax and print money.
You mean "nearly the identity function". A 1-to-1 function is something different (((namely, a function f such that whenever f(a) = f(b), a = b))).
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> It's funny that for something supposedly pragmatic and empirical, as capitalism, there are people invoking the "no true capitalism" defense. This is hugely disingenuous. It's about as fair as crying "no true socialism" if someone were to say "moving towards socialism leads to mass famine! Just look at Mao!". I think part of what makes conversations like this so frustrating for everyone involved is that people are u…
> the market is good at certain things and bad at others, and gov't action is a sensible alternative in the areas it's better at (of which there are quite a few, not least dealing with externalities) or a damaging hindrance in the areas where it's worse than the market mechanism (explicitly setting prices, in most cases). I don't think that's actually true[1]: >Two German microeconomists tested the “widely accepted”…
This isn't really contradicting what I said. As they say, the gap in the West's favor was greatest in the places where the market was relied upon in contrast to a system full of "monopolies, taxes, and subsidies". Neither West Germany nor East Germany had particularly market-oriented economies.
To wit, the market mechanism efficiently provides a price level but that doesn't mean you can't mess it up by poorly planned gov't intervention in the economy (and to be clear, I mean "gov't intervention that is poorly planned", not that gov't intervention is per se ill-advised).
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>> 0% interest rate for several years is not healthy > That's not healthy or unhealthy. It's just a thing. I agree with you generally, but this response is a little silly. What does "it's just a thing" even mean? Given that there's no ironclad economic consensus on this question yet, it's more comfortable to not spend too much time sitting on the ZLB. Now that doesn't suggest anything specific about what costs should…
There's this general sentiment that it should be between 1-3%. But it's just a sentiment mostly based on historical experience. But the global economy is constantly evolving; China wasn't really even a blip on the radar 15-20 years ago. So whose to say what the right level is except the one that is attempting to balance inflation and employment goals.