Fed up, again

posted by
December 21, 2010
Cato Institute
by Steve H. Hanke  
Posted in Commentary

"With the onset of the financial crisis and the collapse of aggregate demand in the United States, the Federal Reserve reached for the standard textbook solution to stimulate demand. Indeed, the Fed pushed shortterm interest rates toward zero — a zone in which they have been trapped ever since. The textbooks tell us that these 'low' interest rates should have stimulated investment and given aggregate demand a big boost. The economy should be in a boom phase. But, it is barely holding its head above water." (12/21/10)


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