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Unpacking Modern Monetary Theory w/ Warren Mosler

Real Vision: Finance & Investing

CHAPTER

The Effect of the Fed Rate Increases on the Economy

I said they're going to, they started cutting rates. Rates went to zero and they cut rates 500, 600 basis points. And I'm looking, they just stopped paying $400 billion of income to the economy. That's a depressing effect. This is a fiscal drag. The deficit's that much lower and it's not going to stimulate the economy or anything. It's going to slow down. If you look at zero rate policies around the world, none of them are associated with credit expansions or growth or anything. Yeah. But you're always thinking it's the chicken and egg because you're thinking that there's zero because of the recession low growth. Maybe they were, but then

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