Interest rates at 2% - why?
I don't understand the argument for not cutting rates to zero in order to keep something in reserve. I suppose it is a psychological one, in that the very act of cutting rates is meant to boost confidence, and if you can no longer do that things will decline further.Thus...the obvious thing to do is to raise rates to about 15%, which will indeed be a psychological blow, but give 15 occasions on which rates can be cut by 1%.
Labels: economics
posted by Matthew @ 12/04/2008 12:28:00 PM
Comments: 0
