Is the Interest Rate a Normal Rate?

4min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Interest rates have been trending downward. Is that explained by inflation? Why didn't we have my first quest, has e rates been zero forever? Means not at last er years. There's no debate about inflation. It's serious. But there is debate at what the normal, long run rate should be. And in these terms, i know ore confusing economists used in all different ways. You could goo, go to the feds report, if any of your readers would do that. A most recent one has the rules right there.

What's so bad about rising inflation? Why should we aim for a rate of 2 percent? Why is it a problem if interest rates are too low--and what do we mean by inflation, anyway? Stanford University's John Taylor talks with EconTalk host Russ Roberts about these questions, the Taylor Rule, why inflation is rising, and what the Fed should do about it. At the end of the conversation, Taylor discusses whether stimulus stimulates and the dangers of the national debt.