Nishant Xavier FRM
New Member
Hello Friends. I am writing an Economics Book: "50 Trillion Dollar Economy: India's Path to Economic Greatness by 2050"
I wanted to inquire of others your thoughts on "Neo-Fisherian" Economics, Economic Permazero - keeping Central Banking Interest Rates permanently low or zero - and similar issues. Do you think it is a Feasible Monetary Policy to keep rates at or near 0? The typical Keynesian objection is that this will lead to "high inflation", but the Fisher Equation - for which there is Great Empirical Support - shows otherwise. Other Empirical Evidence I discuss in my Book (below) also shows the same. Thoughts on this issue, Dear Friends? God Bless.
"
Footnotes:
[1]
https://www.stlouisfed.org/publicat...obvious-solution-to-the-low-inflation-problem
The Evidence Is Devastating:
Bank of Japan (21 years at zero rates):
This vindicates the Neo-Fisherian thought, and rebuts Keynesianism.
When central bankers say:
"Negative rates are unconventional but necessary to boost inflation!"
We respond:
"Really? ECB tried for 8 years. Switzerland for 7. Sweden for 5. Denmark for 10. Japan for 8.
Average inflation across all of them: <1% (target was 2%).
At what point do we admit the theory is wrong and Neo-Fisherians are right?
Low rates cause low inflation. The Fisher equation isn't a suggestion—it's an identity."
*Chapter 2 Begins* ...
I wanted to inquire of others your thoughts on "Neo-Fisherian" Economics, Economic Permazero - keeping Central Banking Interest Rates permanently low or zero - and similar issues. Do you think it is a Feasible Monetary Policy to keep rates at or near 0? The typical Keynesian objection is that this will lead to "high inflation", but the Fisher Equation - for which there is Great Empirical Support - shows otherwise. Other Empirical Evidence I discuss in my Book (below) also shows the same. Thoughts on this issue, Dear Friends? God Bless.
"
Footnotes:
[1]
https://www.stlouisfed.org/publicat...obvious-solution-to-the-low-inflation-problem
The Evidence Is Devastating:
Bank of Japan (21 years at zero rates):
- Nominal rate: ~0%
- Inflation: ~0% (wanted 2%, couldn't get it)
- Stuck in low-inflation trap (can be solved by printing money!)
- Rate: -0.34%
- Inflation: -0.22% (DEFLATION!)
- Rate: -0.50%
- Inflation: 0.79%
This vindicates the Neo-Fisherian thought, and rebuts Keynesianism.
When central bankers say:
"Negative rates are unconventional but necessary to boost inflation!"
We respond:
"Really? ECB tried for 8 years. Switzerland for 7. Sweden for 5. Denmark for 10. Japan for 8.
Average inflation across all of them: <1% (target was 2%).
At what point do we admit the theory is wrong and Neo-Fisherians are right?
Low rates cause low inflation. The Fisher equation isn't a suggestion—it's an identity."
*Chapter 2 Begins* ...