High Real Interest Rates Because of Incipient Rapid Growth?
That’s former CEA Chair Miran’s argument in the FT. Is this assertion empirically validated? A graph from Hamilton, Harris, Hatzius and West (2016) suggests, maybe not: Source: Hamilton et al. (2016) exhibit 3.3, as edited by Chinn. The real rate-growth rate link is clear in a very simple, stylized New Keynesian model, as Hamilton et […]
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