that they and their Treasury advisers do get it, and are acting accordingly.
The other instrument, “monetary policy” – moving interest rates up or down to discourage or encourage borrowing and spending – should play a subsidiary role by keeping rates perpetually low. It’s clear the basic problem we face has switched from excess demand relative to supply to insufficient demand relative to supply. Low inflation means low nominal interest rates, but when rates are already low, cutting them a bit further doesn’t do much to encourage businesses to borrow for expansion or households to borrow more for consumer spending .
Source: Financial Digest (financialdigest.net)
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