by Does higher interest rates inevitably cause inflation? Most proponents of MMT argue that the aggregate demand impact of interest rate changes is unclear. Their effect depends on intricate and complex relations — especially distributional — and institutions which makes it realiter impossible to always be able to tell which way they work. Public budget deficits and higher interest rates may cause inflation to go up — or go down. And if so, the neoliberal dream of the efficacy of central bank inflation targeting is nothing but a fantasy. [embedded content]
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Lars Pålsson Syll considers the following as important: Economics
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Does higher interest rates inevitably cause inflation?
Most proponents of MMT argue that the aggregate demand impact of interest rate changes is unclear. Their effect depends on intricate and complex relations — especially distributional — and institutions which makes it realiter impossible to always be able to tell which way they work. Public budget deficits and higher interest rates may cause inflation to go up — or go down. And if so, the neoliberal dream of the efficacy of central bank inflation targeting is nothing but a fantasy.