A team of economists from some clown college Columbia University argue that what the US economy needs is actually higher interest rates in order to boost inflation expectations.
“In a liquidity trap caused by a confidence shock, an increase in nominal rates tends to raise inflationary expectations without further depressing aggregate spending,” the researchers said. “Any policy that is to succeed in raising inflationary expectations during an expectations-driven liquidity trap must be associated with an increase in nominal rates.”
They make a strong case… that economists are just making it up as they go along.
