Friday, 29 June 2018
Permanent zero interest rates – an update.
I’ve done a update or “second edition” of the paper I published about a month ago advocating the “no government borrowing / permanent zero interest rate” idea. The update / second edition is here. Title of the update is, "A permanent zero interest rate would maximise GDP - (second edition)".
The basic ideas are the same, but hopefully they are better presented. There’s two or three extra references. The main new idea is in section 15 where I have briefly tried to reconcile the permanent zero interest idea with full reserve banking. In fact they “reconcile” very nicely: that is, the two ideas, if anything, positively support each other.
The “no government borrowing / permanent zero interest rate” idea is very much an MMT idea: i.e. all the advocates of the idea seem to be MMTers at the moment.
Warren Mosler, founder of MMT, has written three articles advocating the idea. See 2nd last paragraph here. See also here and here. (For the article titles, see list of references below, which are in the order they are mentioned in the main text here).
There’s an article by Bill Mitchell here, and one by Dan Kervick here.
And finally, there’s me.
Proposals for the Banking System. Huffington.
The Natural Rate of Interest is zero.
There is no right time for the Fed to raise rates. Huffington.
Mitchell. There is no need to issue public debt. Billyblog.
Kervick. Why does Uncle Sam borrow? New Economic Perspectives.