Negative Nominal Interest Rates

Central banks in developed economies face a strange monetary reality. Since the Global Financial Crisis, much of what economists thought they understood about inflation and economic growth no longer applies. The apparent link between low unemployment and inflation seems to have disappeared and the prolonged low interest rates of the past 12 years have been futile in promoting inflation. This unprecedented situation has resulted in … Continue reading Negative Nominal Interest Rates

Badge of USA federal reserve

Modern Monetary Theory: Miracle Solution or Recipe for Disaster

Modern Monetary Theory, or MMT, is a growing macroeconomic theory amongst members of the Democratic Party in the USA, such as Bernie Sanders and Alexandria Ocasio-Cortez. As MMT begins to rear its head in other nation’s political discussion, it is important to understand whether it is truly a miracle solution or an ideological fantasy.   Despite the name, MMT rejects the common consensus that interest rates should … Continue reading Modern Monetary Theory: Miracle Solution or Recipe for Disaster