from The Daily Bell:
Negative rates should be integral part of central bank policy options … Central banks should make negative interest rates a fully integrated part of monetary policy in order to respond effectively to future recessions, according to an academic paper presented on Friday to some of the world’s top central bankers. “It is only a matter of time before another cyclical downturn calls for aggressive negative nominal interest rate policy actions,” concludes Marvin Goodfriend, a professor of economics at Carnegie Mellon University and a former policy adviser at the Richmond Federal Reserve bank. – Reuters
The Federal Reserve meeting at Jackson Hole has been covered by the mainstream media in ways that gave the impression that policy discussions were a kind of theoretical exercise.
Papers were presented on such issues as negative interest rates (see excerpt above) that emphasized an academic context. The idea that comes across is that those involved were earnestly striving to combat US economic dysfunction and current unnaturally low interest rates.
The larger issue here is one that we didn’t find written about: the assumption of the inherent right of policymakers to do what is “necessary” to make the US economy “healthier.”
The debate is certainly cast in theoretical terms but the results will inevitably involve the use of force.
The assumption is that involved in the “monetary debate” will come to a reasoned conclusion that society as a whole will be impelled to adopt. Those who do not wish to adopt such a solution – and who actively resist – may be prosecuted or jailed.
A few days ago, in a lead-up to the conference, the Wall Street Journal published a longish editorial by Dr. Kenneth Rogoff, the Thomas D. Cabot Professor of Public Policy at Harvard University.
Rogoff was also the former chief economist of the International Monetary Fund and the article was taken from an upcoming book, “The Curse of Cash,” to be published in September by Princeton University Press.
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