"Today, persistent low interest rates encourage firms that do invest to
use capital-intensive technologies... In this way, the Fed may still be
contributing to a jobless recovery, when we finally do recover."
Sounds awfully Austrian, doesn't it? (that last sentence would probably be put differently if it were an Austrian)
Sunday, June 24, 2012
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Presumably it's a Keynesian saying this, and your point is, "Aha! See, we're not idiots guys." But I would just say, "Why are you so sure that more Fed easing is the answer, if once in a blue moon some Keynesian acknowledges these points?"
ReplyDeleteWell, actually my take is that he should be careful about these sorts of claims about interest rates - is near zero really "low" compared to the market clearing interest rate? I'm not convinced it is, in which case I'd take issue with him.
DeleteYa, it is a Keynesian that I was surprised to hear sounding so Austrian.
If the statement is true, then we should just blow it out, letting people print money with their own printers, for we know, as a matter of technology, that within x years (20-50 est) there will be no work, and no "economy" for all work will be done by robots that can build and repair themselves?
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