Minnieapolis Fed president out on the wires from a planned event in Frankfurt
- long-run neutral real interest rate has declined significantly
- fiscal authorities can boost neutral rate
- not arguing for govts to issue more debt, which has its own costs
"I want to be clear at the outset that I am not saying it is appropriate for fiscal policymakers to increase the long-run level of public debt. I am simply pointing to one benefit associated with such an increase: it allows the central bank to be more effective in mitigating the impact of adverse shocks to aggregate demand"
Ok, so he's a long-time dove and leaving the Fed at the end of the year but is anyone out there really still looking for a 2015 rate hike ?. Not gonna happen IMHO
Kocherlakota - Real interest rate decline makes Fed's job harder
