Tag Archives: Interest Rate

In their most recent 10-year budget and economic forecast, the CBO made a big change, reducing their long-run forecast of the interest rate on government bonds by almost a full percentage point, from 3.7 to 2.9.  Most directly, the new, lower interest rate reduces expected debt payments over the next decade by $2.2 trillion. It also significantly reduces the expected debt-GDP ratio. Under the assumptions the CBO was using at the start of this year, the debt ratio under existing policy...

Another quote from the recently published MMT textbook. Lars P. Syll’s BlogThe interest rate fallacyLars P. Syll | Professor, Malmo University

Pubblichiamo la traduzione su Brave New Europe, una rivista online edita a Berlino, del pezzo su Econopoly. Sergio Cesaratto and Antonio Iero – It’s the interest rate, stupid! November 16, 2018 Economics, EU politics, EU-Institutions, Finance, National Politics Words of reason, but this is about German led social re-engineering in the EU rather than economics. Sergio Cesaratto is Professor of Growth and Development Economics and of Monetary...

Federal Reserve Chair Janet Yellen said Tuesday that the central bank should continue to use interest payments on member bank reserve balances as its primary means of affecting short-term interest rates, rebuffing calls to return to more conventional monetary policy tools.... American BankerFed interest payments to banks are here to stay, Yellen says John Heltman

The topic centres on an agreement between the US Federal Reserve System (the central bank federation in the US) and the US Treasury to peg the interest rate on government bonds in 1942. What the agreement demonstrated is that a central bank can always control yields on government bonds, which includes keeping them at zero (or even negative in the current case of Japan). What it demonstrates is that private bonds markets, no matter how much they might huff and puff about their own importance...

Must-read for anyone interested in MMT.Lars P. Syll’s BlogAbba Lerner and functional financeLars P. Syll | Professor, Malmo University